The massive spike in value saw investors from all over the world show interest in the cryptocurrency industry and rush to purchase bitcoins.
The surge in bitcoin popularity also caused businesses across the world to adopt BTH as part of the payment system and as a result bitcoin users could buy food, phone credits, and even real estate.
The sudden spike in bitcoin value has been put down to a number of factors.
A recent study from Stevens Institute of Technology suggests that social media is playing a role in determining bitcoin’s value.
Stevens Institute of Technology: Market Study
According to researchers at Stevens Institute of Technology, bitcoin prices can be manipulated by public opinion. This study also links bitcoin prices with social media behavior. Led by Professor Feng Mai of the Stevens School of Business, the study looked at how bitcoin prices behaved in its short history.
The results tend to show that the period when bitcoin prices skyrocketed correlate with period when bitcoin was viewed positively on social media. However, what is surprising about this study is that the price of bitcoin is not being influenced by its most vocal supporters but by silent followers who tend to heed these loud voices on social media.
The study revealed that active users who kept on tweeting about bitcoin and cheerleading it cause did not have much influence on the value of bitcoin directly. However, when those who rarely contribute to the online discussion start to comment on bitcoin positively, bitcoin’s value tends to go up.
How The Study Came to This Conclusion
Mai worked with Ivey Business School, Dickinson College and the University of Cincinnati to go evaluate twenty four months of forum posts on Bitcointalk. The forum stands as one of bitcoin's largest online forums and is a good barometer of online opinion on bitcoin.
The study's methodology had Mai and his team browsing through posts and classifying them into various categories such as positive and negative. The classification did not stop there as the team also looked at post frequency to see who was active in posting and who was not.
Apart from the forum, they also analyzed around 3 million Twitter posts, which corresponded to two months' of tweets about Bitcoin. These posts were then compared to the changes in bitcoin prices, before, during, and after the posts. The final conclusion of the study was that social media is playing a role in determining the rise and fall of bitcoin’s value.