How a New Crypto Metric Could Democratize a Wild Market

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How a New Crypto Metric Could Democratize a Wild Market

According to Bloomberg, the cryptocurrency industry, which has been dominated by large investors, might witness a surge in growth as individual investors compete with mutual funds and professional organizations. Smaller investors now have access to a new gauge established by trading platform eToro, which utilizes artificial intelligence and linguistic analysis to monitor investor mood by examining over 850 million tweets every day.

One of the most popular subjects of debate on Twitter is cryptocurrencies. Through a collaboration with Social Market Analytics, the new sentiment-based portfolio monitors tweets for the most recent favorable or negative evaluations of digital assets.

‘Crypto Is Void of Valuation Metrics’

The technology has the potential to attract ordinary customers who have hitherto been excluded from crypto trading and democratize the embryonic sector. Through a cooperation with The TIE, eToro claims its retail investors now have access to its new cryptocurrency data analytics tool, TheTIE-LongOnly CopyPortfolio.

The financial product is now available on eToro’s trading platform, with a minimum investment of $2,000 required. Aside from the spreads on the assets exchanged, there will be no further costs for utilizing CopyPortfolio.

“We discovered that bitcoin is an asset class devoid of valuation measures,” stated Josh Frank, CEO of The TIE, to Bloomberg. “With cryptocurrency, supply and demand are the only things that actually move it, therefore we set out to build sophisticated tools for hedge funds to assist evaluate and trade the asset class.”

“The ultimate consequence is that regular investors will have the opportunity to participate utilizing a method that was previously only accessible to hedge funds,” said Guy Hirsch, eToro’s U.S. Managing Director.

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What’s Next?

To be honest, not everyone is thrilled with the new tweet-analysis method. According to Utpal Dholokia, head of marketing at Rice University, it would provide an opportunity for traders to influence prices and push them upward.

“Crypto markets are niche markets, with a specialized community of investors and players.” Buying habits are heavily influenced by social factors. Potential investors often seek for other investors’ activities to determine whether or not to acquire a certain cryptocurrency,” he stated. Dholokia suggests considering social influence as “part of a variety of diverse signals” rather than as a singular metric.

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