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Bitcoin’s price
Analysis of Bitcoin’s price spike spike
in context of Elon Musk’s
Twitter activity
Salma Zaman and Ussama Yaqub
Business School, Lahore University of Management Sciences,
Lahore, Pakistan, and Received 16 September 2021
Revised 19 December 2021
Accepted 4 January 2022
Tauqeer Saleem
Lahore University of Management Sciences, Lahore, Pakistan

Abstract
Purpose – The purpose of this paper is to explore the effect of Elon Musk’s Twitter bio change on January
29, 2021 on the discourse around Bitcoin (BTC) on Twitter and to understand how these changes relate to the
changes in Bitcoin price around that time.
Design/methodology/approach – This study implements sentiment analysis and text mining on
Twitter data to explore changes in public sentiments toward Bitcoin after Elon Musk’s Twitter bio change.
Furthermore, it uses Bitcoin price data obtained from the Binance exchange to understand its relation with
Twitter discussion.
Findings – Elon Musk’s bio change on Twitter on January 29 increased the tweet volume mentioning
Bitcoin. This increase in tweets had a strong positive correlation with Bitcoin price and preceded the rise in
Bitcoin price. Although the bio change had an apparent effect on the tweet volume, there was no considerable
effect on the tweet sentiments, indicating that tweet sentiment is a poor predictor of Bitcoin price.
Originality/value – This paper proposes an understanding of how social media influencers, like Elon
Musk, affect the discourse around Bitcoin and can, in turn, have an impact on Bitcoin price.
Keywords Sentiment analysis, Twitter, Bitcoin, Elon Musk
Paper type Research paper

Introduction
Social media use has become widespread, especially following the rapid increase in
smartphones and cellular services worldwide. An increasing number of people worldwide
continue to join these online platforms to interact with each other and voice opinions.
Everything is under discussion on these platforms, from movies and sports to global issues
like global warming and politics. As these social media websites are easily accessible and
many people use them regularly, they reflect what is happening in the world. Twitter is one
such social media platform that started in 2006 and has over 330 million monthly active
users [1]. These users range from ordinary people and celebrities to firms, news agencies
and governments. With this considerable number of diverse users, it is safe to assume that if
something interesting happens somewhere in the real world, someone on Twitter will tweet
about it. Thus, we have witnessed an increased research activity involving twitter data
where researchers are predicting stock price or elections results based on data collected from
Twitter. Global Knowledge, Memory and
Communication
One area that has significantly attracted researchers’ attention is the impact of Twitter © Emerald Publishing Limited
2514-9342
discourse on the price of cryptocurrencies (Kraaijeveld and De Smedt, 2020; Mohapatra et al., 2019). DOI 10.1108/GKMC-09-2021-0154
GKMC A cryptocurrency is a digital currency designed to work as a medium of exchange between two
untrusting parties online. It is built using blockchain technology and provides numerous benefits
over conventional money, such as decentralization and no association with a higher authority
(Corbet et al., 2019). Bitcoin is the oldest cryptocurrency, which was launched pseudonymously in
January 2008 (Nakamoto, 2008). The idea behind Bitcoin was a peer-to-peer payment system that
allows direct online payments between two parties without going through a financial intermediary
(Bouoiyour et al., 2016). Although it took over a decade, the market eventually realized the
disruptive potential of Bitcoin, and now Bitcoin commands a market capitalization of over US$1tn.
However, being nascent and recent, current government regulations on cryptocurrencies are
limited, as they are not recognized as a mature asset class. Furthermore, these currencies are
traded on centralized and decentralized exchanges, which operate 24/7 and have buyers and sellers
worldwide. Hence, this lack of regulation, coupled with high popularity and 24/7 trading, make the
cryptocurrency markets very volatile and have even been called the “wild west of finance” (Aspris
et al., 2021).
In this paper, we aim to explore whether Twitter impacts the price of Bitcoin. In
particular, we study the impact Twitter influencer Elon Musk has on Bitcoin’s price. Elon
Musk has 44 million followers on Twitter and is considered a tech industry leader,
spearheading technology companies like TESLA and SpaceX. On the January 29, 2021,
around 8:30, Musk changed his Twitter bio, indicating support for Bitcoin, increasing the
Bitcoin price by almost 17% (around US$5,000) [2] in a few minutes. Figure 1 shows this
price increase during this period. Musk is thought to have influenced the price of assets
before as well, when he caused an increase in the GameStop stock price by 105% after
tweeting “Gamestonk!!” on January 27, 2021.
Our study will aim to make three contributions. We will assess the impact Musk had on
Twitter activity after he changed his Twitter bio. We will then study how the sentiment of
Bitcoin changed on Twitter after he changed his Twitter bio. Finally, we will assess the
change in Bitcoin price that resulted from this update to his Twitter bio change.

Literature review
Analysis of Twitter data for real-world event prediction has become a popular area of
research. For example, few studies have explored the political discourse on Twitter in the US
presidential election (Yaqub et al., 2020), while other studies have focused on information

Figure 1.
Price of Bitcoin for
our analysis
dissemination during a public health crisis (Ilyas et al., 2021; Lent et al., 2017). In addition, Bitcoin’s price
previous studies have explored the relationship between Twitter sentiment and volatility in spike
national currencies (Ilyas et al., 2020; Komariah et al., 2015; Ozturk and Ciftci, 2014). Recent
studies have investigated the correlation between tweet sentiment and changes in the
financial markets (Aich et al., 2017; Cakra and Distiawan Trisedya, 2015; Gupta and Singal,
2017; Ilyas et al., 2020). Similarly, it has been argued that tweet sentiment can be used to
predict the Dow Jones industrial average and stock market volatility (Bollen and Mao, 2011;
Mittal and Goel, 2012). Such studies using sentiment analysis to predict real-world events
such as elections and stock markets have had mixed results. Some studies suggest that
stock market and public opinion can be gauged correctly through Twitter sentiment
analysis (Aich et al., 2017; Cazzoli et al., 2016; Ilyas et al., 2020; Yaqub et al., 2017). Hurd and
Rohwedder (2012) explain that the stock market is impacted by people’s expectations,
shaped by political and economic news, which means that the stock market is sensitive to
changes in the macro-environment (Yang et al., 2018). As Twitter sentiment reflects changes
in the external environment (Aich et al., 2017; Gupta and Singal, 2017), it can theoretically
predict changes in the stock market using sentiments (Sul et al., 2014). Even though studies
in the past have shown that tweets can be used in improving the accuracy of stock
predictions, there is little evidence that tweets themselves impact the financial market.
Furthermore, few studies have suggested that the impact of influencers, rather than the
collective sentiment of all Twitter users, have a significant effect on stock market prices
(Cazzoli et al., 2016), in which case the opinion of general masses on Twitter loses its worth
as a predictive variable.
Similarly, the role of social media on cryptocurrency price, particularly Bitcoin price, is
also a popular area of research (Bouoiyour and Selmi, 2017; Georgoula et al., 2015).
Cryptocurrencies are not backed by any traditional tangible asset or sovereign government
and do not have any intrinsic value (Baur et al., 2015). Therefore, the value of cryptocurrency
derives not from gold or government fiat but from the value people assign to them because
of trust and acceptance (DeVries, 2016). Thus, we cannot use traditional methods to estimate
the price of cryptocurrencies. Previous studies have shown that the Bitcoin price is not
affected by the macroeconomic environment and behaves as a speculative bubble
(Bouoiyour and Selmi, 2015). Thus, the dynamics of the Bitcoin price and other
cryptocurrencies should relate to pertinent discussions and opinions on social media, where
investors and business adopters interact and provide feedback about the market. Therefore,
social media platforms can provide insight into public view, allowing researchers with
the unique opportunity to observe and understand the interplay of social media with the
value of a financial instrument like Bitcoin, which is solely present online (Mai et al., 2015).
Just as Hurd and Rohwedder (2012) argue that people’s expectations impact the stock
market, Prajapati (2020) argues that the general population’s sentiments affect the market
capital of cryptocurrencies, hence, Bitcoin. Pant et al. (2018) and Kristoufek (2015) also note
that Bitcoin’s price seems to be affected by dramatic events and impactful news around the
globe, which further adds to the hypothesis that Bitcoin price is subject to the influence of
the general masses. Some studies have found that online information about Bitcoin only
caused short-run price fluctuations during the first years after its introduction; however,
with time and growth in general understanding in the public of Bitcoin, the impact of online
information searches seems to be minimal (Ciaian et al., 2016). Karalevicius et al. (2018) also
present a similar finding in their study and suggest that “interaction between media
sentiment and the Bitcoin price exits, and there is a tendency for investors on the news in a
short period of time.” Other studies focusing on short-term price prediction of Bitcoin also
conclude that the prices of Bitcoin do seem to depend of Twitter sentiments (Jain et al., 2018),
GKMC and for long-term prediction, we also see researchers arguing that sentiments affect the price
of Bitcoin (Sattarov et al., 2020). Furthermore, just as Cazzoli et al. (2016) identified that
influencers’ impact is more significant than collective sentiment for stocks, this may be also
the case for Bitcoin, where its price is influenced by social media influencers rather than
general sentiments. Mirtaheri et al. (2021) also note that the prices of cryptocurrencies can be
manipulated by individuals or small groups using pump-and-dump schemes.
Furthermore, it is also not clear whether sentiments predict the price of Bitcoin or tweet
volume, as impactful news or significant events can cause changes in sentiments and tweet
volume. Previous research has also explored the relationship between tweet volume and
stock prices and found a strong correlation between the two (Sprenger et al., 2014; Tafti et al.,
2016). Similar studies on Bitcoin have also indicated that the number of tweets is a
significant driver of Bitcoin trading volume instead of sentiments (Abraham et al., 2018;
Shen et al., 2019). Therefore, we must identify whether tweet volume, general tweet
sentiment or both affect the price of Bitcoin and how much individual influencers impact
Bitcoin price compared to the general population’s sentiment.
Such activities usually use Twitter to create hype around a cryptocurrency and inflating
its price. A more recent and individual caused example Bitcoin price change is that of Elon
Musk. His change of Twitter bio to #bitcoin increased Bitcoin’s price by US$5,000 in an
hour [3]. This event demonstrates that for a complete picture of understanding the dynamics
of Bitcoin pricing, it is crucial to understand how influencers like Elon Musk affect the price
of Bitcoin. This concept has been previously used in the form of TRUMP2CASH [4], an
algorithm that traded any financial instrument (stocks and cryptocurrency) based on
Trump’s tweets, which claimed to achieve 59% returns. The next logical questions to ask
are these models applicable in the case of Elon Musk and whether his bio change increased
the price of Bitcoin via tweet volume or change in sentiments.

Hypothesis development
In this section of the paper, we develop our research questions, which will be answered
through data analysis. The event in question for this research paper is Elon Musk’s bio
change to Bitcoin icon on January 29, 2021 (Figure 3), which led to an increase in Bitcoin
price of over 17% in a few minutes. But before delving deeper into analyzing the effect of
this event on Bitcoin price, we need to understand the impact of Elon Musk’s bio change on
Twitter activity, such as tweet volume and sentiments. Therefore, for our first research
question, we evaluate the effect of this bio change on Twitter activity. Hence, we propose the
following research question:

RQ1. What was the impact of Elon Musk’s Twitter bio change on Twitter activity
related to Bitcoin?
Along with the activity related to Bitcoin, we also evaluate the sentiment of discussion
surrounding Bitcoin on Twitter. Various research studies have examined the correlation
between Twitter sentiment and economic indicators such as the stock market and currency
exchange rate (Ilyas et al., 2020). Furthermore, many studies have also investigated the
correlation between sentiments and Bitcoin price (Abraham et al., 2018; Pant et al., 2018;
Shen et al., 2019). Few studies found a weak correlation between Twitter sentiments and
Bitcoin price (Pant et al., 2018), while few other studies found Twitter sentiments to be a poor
predictor of Bitcoin price and tweet volume to be a better predictor (Abraham et al., 2018).
Therefore, it is a golden opportunity to test the relation of tweet sentiments with Bitcoin
price and compare the previous results in this unique event. We propose the following
research question:
 Bitcoin’s price
RQ2. What did the impact of Elon Musk’s Twitter bio change have on the sentiment of spike
the Bitcoin discussion on Twitter?
Finally, we look at the impact on price of Bitcoin based on the on Twitter activity. As
discussed previously, discovering the relationship between Twitter sentiment and financial
markets has remained a popular area of research. Various research studies have
investigated the predictive power of Twitter sentiment in terms of financial markets (de O.
Carosia et al., 2019; Sprenger et al., 2014). Furthermore, diverse approaches have been taken
in using Twitter data to predict cryptocurrency prices. Pant et al. (2018) used neural
networks to predict Bitcoin price using tweet sentiments, while Abraham (2018) used tweet
volume and tweet sentiment to predict the price of Bitcoin and Ethereum. Another area of
research related to social media and Bitcoin price has been to understand the impact of
social influencers on consumer purchase intention. Nam and Dan (2018) argue that
consumers trust influencers firmly, and therefore, their purchase intention is significantly
impacted by the influencers. In the context of Bitcoin, influencers should cause changes in
the price of a financial instrument by expressing their opinions/stance on social media like
Twitter. Elon Musk has a huge Twitter following, and he has already made a name for
himself as a visionary and futurist. Therefore, it is no doubt he can be considered a social
media influencer, and the event of January 29, 2021, can be seen as an influencer meddling
with Bitcoin prices using his social media followers. Hence, we propose the following
research question:

RQ3. What did the impact of Elon Musk’s Twitter bio change and resulting activity on
Twitter have on the price of Bitcoin?

Methodology
Data
For this study, we collected tweets for 7 h and 18 min from 05:49 to 13:05 GMT on January
29, 2021. We used the Twitter streaming Application Programming Interface (API) to
download Twitter messages containing the words “Bitcoin” or “BTC.” In total, we
downloaded over 199,000 Twitter messages for this period. Furthermore, the minute-by-
minute Bitcoin price, trading volume and number of transactions were taken for Binance
cryptocurrency exchange [5], the largest exchange globally in terms of users, transactions
and trading volume.

Data cleaning
Data gathered from Twitter was cleaned for sentiment analysis, word cloud and word
frequency analysis. We removed URLs, email addresses and emojis from the downloaded
text messages. Abraham et al. (2018) and Katayama et al. (2019) cleaned tags, URLs
and emoji from tweets in a similar fashion. We also removed stop words such as “a,” “is” and
“are” from all tweets by using the standard stop-word list provided in the python word
cloud library. We added the words “Bitcoin” and “BTC” to the default stop-word list as well,
as these words were used to filter the tweets while downloading and every message
contained either one or both.
For our sentiment analysis, we further filtered these tweets on user language provided in
the tweet metadata. As we used the English language VADER library for sentiment
analysis, we only used tweets that were in English. This further reduced our sentiment
GKMC analysis data set to around 156,000 tweets. However, we used all tweets in our data set
regardless of the language when evaluating the count of tweets vis-a-vis the price.

Sentiment analysis
We use the VADER python library for sentiment analysis, which is a lexicon and rule-based
sentiment analysis tool (Hutto and Gilbert, 2014). VADER is suitable for our Twitter corpus
sentiment analysis as the tool is specifically created to extract sentiment from short
informal social media messages.
VADER operates by providing four scores for each tweet: positive, negative, neutral and
compound score. For this study, we focus only on compound score, which tells us the overall
sentiment of the text as negative or positive. This score ranges between –1 and þ1, where a
score around þ1 is an incredibly positive sentiment, while a score around –1 is a highly
negative sentiment. For our analysis, we have used this compound score to classify tweets in
our data set as positive or negative. In previous literature, VADER has been used by
Abraham et al. (2018) and Valencia et al. (2019) for cryptocurrency price prediction.
Furthermore, Wołk (2020) has used VADER in short-term cryptocurrency price prediction,
which is more relevant to our discussion as our paper focuses on a short-term focus.

Data analysis
In this study, we used 199,000 tweets, created over 7 h, containing the keywords “Bitcoin” or
“BTC.” Out of these, 158,000 tweets were in the English language that we used for sentiment
analysis and word cloud. Figure 2 shows the histogram of tweet sentiment. We can observe
from Figure 2 that most of the tweets in the data set have a neutral sentiment. Furthermore,
we also see that there are more positive sentiment tweets than negative sentiment in the data
set. We also see this overall positive trend in the time series of sentiment. From Figure 3, we
can see that the mean sentiment per minute was positive throughout our analysis.
Interestingly, both Abraham et al. (2018) and Katayama et al. (2019) observed similar tweet
distribution. Abraham (2018) noted that half of the tweets gathered were neutral, which
seems to be the case with our distribution as well.

Impact of Elon Musk’s Twitter bio update on Bitcoin tweets

Our first research question relates to the impact of Elon Musk Twitter bio update on the
activity on Twitter. As mentioned earlier, Elon Musk updated his Twitter bio with #bitcoin
at around 8:30 a.m. GMT (3:30 a.m. EST) on January 29, 2021 [6]. Figure 4 displays this
update of the Twitter profile.
This event led to a frenzy of Twitter activity related to Bitcoin, which became trending
on Twitter. We observe a similar pattern in our data set where from 8:30 a.m. onward, we
see a spike in tweets mentioning Bitcoin. Figure 5 shows this increase in tweets mentioning
Bitcoin:
Musk’s bio change not only increased the number of people engaging in Bitcoin-related
discourse on Twitter but also changed the nature of it. Using a word cloud analysis, we can
observe the difference between the frequently mentioned words before and after 8:30, the
approximate time Elon Musk changed his bio. It can be seen in Figure 6 that before 8:30, the
Bitcoin discourse was dominated by other coins, such as fantom (FTM) and dogecoin, and
crypto-wallets likes NeoBenk, CCTip and CoinKit. After the bio change (Figure 7), the
discussion is dominated by Elon Musk and his bio change, which shows the degree of hype
created by the event.
 Bitcoin’s price
spike

Figure 2.
Histogram of tweet
sentiment

Figure 3.
Trend of tweet
sentiment mentioning
Bitcoin during the
period of our analysis

Figure 4.
Elon Musk bio update
with Bitcoin on
January 29, 2021

Impact of Elon Musk Twitter bio changes on the sentiment of Bitcoin on Twitter
Along with evaluating the impact of Elon Musk’s bio change on the volume and nature of
tweets mentioning Bitcoin, we also assess the sentiment of messages mentioning Bitcoin
during this time. We use the same 7-h period used in the analysis of the previous question.
However, we only use messages in English for the sentiment analysis as we use VADER to
GKMC

Figure 5.
Number of tweets
mentioning Bitcoin

Figure 6.
Word cloud for
tweets before Elon
Musk’s bio change

perform sentiment analysis. A total of 158,381 tweets in our data set were in English, which
were used for the sentiment analysis.
Figure 8 shows the correlation between tweet sentiments and Bitcoin price in our selected
period. Sentiments are generally positive and do not change much with the changes in
Bitcoin price. Instead, we see a decrease in average sentiment as the Bitcoin prices increase
between 8:30 and 9:30. Thus, tweet sentiments do not relate to the Bitcoin price and cannot
be used as a predictor variable. Abraham et al. (2018) has also provided a similar analysis,
where he notes that the fall or rise in sentiments does not correspond with the fall or rise in
Ethereum and Bitcoin’s price.

Impact of Twitter activity on the price of Bitcoin

Finally, in the last part of our research question, we look at the correlation between
Twitter activity and the price of Bitcoin. We perform this analysis by comparing the
 Bitcoin’s price
spike

Figure 7.
Word cloud for
tweets before Elon
Musk’s bio change

Figure 8.
Correlation between
Bitcoin price and
sentiment of tweets
mentioning Bitcoin

minute-by-minute number of messages mentioning Bitcoin on Twitter with the price of

Bitcoin on Binance.
We discover a strong correlation between the number of tweets per minute and price.
Figure 9 shows the price and number of tweets mentioning Bitcoin over the same period.
The values of both are normalized between 0 and 1 for a fair comparison. We can see that
both charts show a very similar trend. This is confirmed by our correlation analysis between
normalized Bitcoin price and the number of tweets mentioning Bitcoin. We discover a
positive correlation of 0.88 between the two with a p-value of 2.11 e-142, which points to a
significant statistical relationship.

Discussion
This study uses social media analytics to gauge the impact of Elon Musk’s Twitter bio
change on the price of Bitcoin. Various research studies have looked at the role and impact
GKMC

Figure 9.
Correlation between
Bitcoin price and
number of tweets
mentioning Bitcoin

of social media influencers on consumer purchase intention. Here we are looking at the
impact on the price of Bitcoin cryptocurrency. We created three research questions that were
answered by our data analysis.
For our first research question, we looked at the impact of Elon Musk’s Twitter bio
update (Figure 4) on the messages on Twitter discussing Bitcoin. We discover a significant
uptick in the number of tweets mentioning Bitcoin on Twitter. Figure 5 shows the number of
tweets mentioning Bitcoin during the time of our analysis. We can observe a visible increase
in the number of messages that mentioned Bitcoin. This result is not surprising as Elon
Musk ranks as the richest man globally [7] and is a technology pioneer founding companies
like Tesla and SpaceX. He had over 44 million Twitter followers at the time of this analysis.
As other studies have also indicated, users trust social media influencers. They are strongly
influenced by their online opinions (Nam and Dan, 2018). Social media influencers wield
considerable online influence from eating habits to brand image as likability,
trustworthiness and familiarity play an essential role in influencing user opinions and
purchase decisions (Anuar et al., 2020; Arora et al., 2019; Coates et al., 2019). One important
thing to notice here is the bio change did not just create a Bitcoin tweet fad; it made a long-
lasting increase in Bitcoin discussion on Twitter. Before 8:30, the tweets per minute are
around 200 tweets per minute. From 8:30 to around 9:30, the number of tweets per minute
increased, hitting a maximum of about 700, after which it stabilizes around 450 tweets per
minute till the end of our data set. So not only did Elon Musk’s bio change increased the
Bitcoin-related Twitter activity, but it also brought in a permanent positive shift in Bitcoin
discussion, which can be the fundamental cause of price increase.
For our second research question, we investigated the impact of change in Elon Musk’s
bio on the sentiment of Bitcoin-related discussion on Twitter. Figure 3 displays the
sentiment trend during the period of our analysis. We do not discover any significant
increase in the positivity of tweets after Elon Musk’s bio change. Furthermore, the average
compound sentiment of tweets was positive even before Elon Musk’s bio change; therefore,
the sentiment of Bitcoin-related tweets cannot be said to have been influenced by the event.
For the last research question, we looked at the price of Bitcoin and tweet volume in the
7 h and noted a strong positive correlation between the two variables. Furthermore, it can be
seen in Figure 7 that the rise in tweet volume precedes the rise in Bitcoin price, which rules
out rising price, causing a rise in the tweet volume. This indicates that tweet volumes can be
a good predictor of future Bitcoin prices. Abraham et al. (2018) used a data set spanning
60 days with intervals of 15 min and two cryptocurrencies (Bitcoin and Ethereum) and Bitcoin’s price
reached a similar conclusion. They noted that the sentiments remained positive throughout spike
the data set, and the changes in Bitcoin price did not correspond with changes in sentiment.
Abraham et al. (2018) also found a strong positive correlation of 0.841 between tweet volume
and Bitcoin price, which is very close to the value of our results.
Our findings are in conflict with the results of Prajapati (2020), Pant et al. (2018), Jain et al.
(2018), as we find tweet sentiments to be a poor predictor of Bitcoin price in the short term.
Apart from that, our results match that of Kristoufek (2015) and Pant et al. (2018), in the
sense that both these authors also state that Bitcoin has speculative properties, and its price
seems to be affected by significant events (in our case, Elon’s tweet is the significant event).
Furthermore, our results seem to coincide significantly with Cazzoli et al. (2016) as we also
find that instead of the population’s sentiments being the driver of change, important
individuals play a greater role in changing crypto prices. Furthermore, our results also
match Abraham et al. (2018), Sprenger et al. (2014), Tafti et al. (2016) and Shen et al. (2019),
who also found the tweet volume instead of sentiments to be a better predictor of price for
Bitcoin and stocks. Lastly, for Sattarov et al. (2020) results, we cannot compare the findings
as they focus more on long-term price prediction, whereas the scope of this research was
short-term price change; future work can shed further light.
The theoretical and practical implications of our results are multifaceted. The undeniable
implication is that social media influencers can impact a market. Even though we have made
the Bitcoin tweet the center of our research, we see similar examples with Elon Musk and his
social media activity. Two recent examples are that of GameStop and Dodge coin. In both
cases, Elon Musk tweeted about them (in the case of GameStop, Elon’s tweet was just
“Gamestonk!!”), and we saw a sharp rise in their price, and then gradually settling on higher
price. This study demonstrates that business can affect the market using social media
influencers, giving academic understanding to the rising trend of influencer marketing done
by many companies.
In terms of a theoretical economic understanding, this study demonstrates how social
media can influence the demand curve of any item, hence increasing its price. As our study
showed, even if the economic agent is acting irrationally (buying stuff not based on rational
considerations but based on a tweet), a shift in the demand curve might not accompany any
considerable change in sentiments, which can sound counterintuitive, as one might expect
an irrational action by people to influenced by sentiments, or at least be accompanied by
changes in emotions.

Conclusion
Previous studies have focused on establishing a relationship between tweet sentiments and
Bitcoin price, assuming sentiments to be a proxy for interest in Bitcoin and hence a proxy
for Bitcoin demand. Most of the studies have found a weak correlation between the two,
which turned out to be the case in our study. Therefore, we concluded that tweet sentiment
is not a good predictor for Bitcoin price. The explanation for why an influencer like Elon can
affect the Bitcoin market without affection overall tweet sentiments is provided by Abraham
et al. (2018) who note that people tweeting about Bitcoin are interested in it; therefore, they
will have a positive sentiment toward it whatever the price change in Bitcoin. This will lead
to mostly positive sentiments being recorded and hence will introduce a bias in the study.
As tweet sentiment is generally positive and biased for Bitcoin, it cannot provide valuable
information regarding Bitcoin prices. Instead of sentiments, tweet volume is a better proxy
for general interest in Bitcoin, and therefore, can be a better proxy for demand. Our results
show that there is a strong correlation between tweet volume and Bitcoin price. Lastly, our
GKMC research provides a glimpse of how social media influencers can affect a market, and
surprisingly, social media influencers can influence the short-term demand of any object,
without bringing any noticeable change in the sentiments of people on that social media
platform.

Limitations
Although highly unlikely, it is possible that a poor relation between tweet sentiments and
Bitcoin price might be due to focusing on only English tweets. As we are analyzing the
sentiments of around 80% of the tweets, it is possible that if the rest of 20% of the tweets
were incorporated, the analysis would have resulted in a positive relation between sentiment
and Bitcoin price. Although 80% is a fair representation of the whole population, this 80%
has not been selected randomly, which might introduce a bias into our results.
Another possibility is that even though there might have been no change in the number
of tweets negative sentiments, the increase in neutral tweets after Elon Musk’s bio change
might be offsetting the increase in positive tweets, which might result in an overall
decreased compound sentiment that we observe between 8:30 and 9:30. It might be possible
that if the effects of neutral, positive and negative sentiment scores of tweets are analyzed
separately instead of a single compound score, the results might be different.
Lastly, we have undertaken this study in the context of Elon Musk’s bio change, which
resulted in a price increase. An event causing a massive drop in price is needed to be studied
in a similar way to generalize the findings of this paper.

Notes
1. Available at www.statista.com/statistics/303681/twitter-users-worldwide/
2. Available at www.cnbc.com/2021/01/29/bitcoin-spikes-20percent-after-elon-musk-adds-bitcoin-
to-his-twitter-bio.html
3. Available at www.cnbc.com/2021/01/29/bitcoin-spikes-20percent-after-elon-musk-adds-bitcoin-
to-his-twitter-bio.html
4. Available at www.github.com/maxbbraun/trump2cash
5. The data was taken from www.cryptodatadownload.com/data/binance/
6. Available at www.cnbc.com/2021/01/29/bitcoin-spikes-20percent-after-elon-musk-adds-bitcoin-
to-his-twitter-bio.html
7. Available at www.forbes.com/sites/elizahaverstock/2021/10/26/elon-musk-nearing-300-billion-
fortune-is-the-richest-person-in-history/?sh=2d5a6c961933

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Corresponding author
Ussama Yaqub can be contacted at: ussamayaqub@gmail.com

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