The Influence of AI-Identified Consumer Sentiment Metrics on Crypto-Asset Prices

This study analyzes the explanatory power of AI text-based emotion ID metrics on the hourly price change of 12 major crypto-assets. Five GARCH models were tested, with the results providing evidence of a positive relationship between the number of mentions of a crypto-asset name in searches and its price change for 10/12 assets. AI text-based emotion detection metrics also provided marginal evidence of forecasting power for most assets (3/12) and little evidence (3/12) of the predictive power of the name "Bitcoin" as a generic reference term. Practical applications for analysts looking to employ AI text-based emotion ID tech in their models are noted.