The Performance of Cryptocurrencies under a Sentiment Analysis Approach in the Time of COVID-19

This paper examines the performance of the most popular and highly capitalized cryptocurrencies during the COVID-19 era under a sentiment analysis view. We investigate Bitcoin (BTC), Ethereum (ETH), Binance (BNB) and Cardano (ADA) during the period 1/1/2020-30/9/2021. Using Google trends indices, we test the impact of COVID-19 fear to the performance of the cryptocurrencies, and the empirical evidence show that when the health risk increases the BTC, BNB and ADA prices fall (and vice versa). Moreover, we generate two additional indices based on Google searches that reveal the users’ intention to buy and intention to sell cryptocurrencies. The empirical evidence shows that only the Google index which reveals the users’ intention to buy a cryptocurrency could be a useful and statistically significant factor for the crypto performance. Thus, the sentiment analysis based on the Google searches could be useful for the internet based market of cryptocurrencies and further study for on this direction should be done