eToro has linked up with crypto analysis company The TIE to create a crypto portfolio based on social media sentiment, in a sign of just how hype, merited or otherwise, impacts projects in the space. TheTIE-LongOnly CopyPortfolio analyses millions of tweets per day for sentiment on coins and tweaks the portfolio based on the messages it picks up, opening long positions where it feels profits can be made before selling out when chatter dies down.
eToro Puts Twitter Traders’ Money Where Their Mouths Are
TheTIE-LongOnly CopyPortfolio, which launched with DASH, EOS, XRP, MIOTA, and ETC, uses “highly advanced natural language processing tools to determine market sentiment towards crypto on social networks”, data it then uses in algorithmic trading. TheTIE launched their algorithm in October 2017, since when it has generated a 281.% return after fees, with backdated tests showing that the algorithm thrives in a bull market, something that might be of particular interest to investors as we exit crypto’s longest bear market in history.
Millions of Tweets Analyzed Per Day
TheTIE uses the Twitter “firehose”, a full real-time stream of every tweet sent over the platform, to search for genuine tweets about cryptocurrencies, according to its proprietary natural language scanner. This means that TheTIE must digest in the realm of 850 million tweets per day, a task we wouldn’t even wish on Craig Wright. Changes in portfolio are determined by “the wisdom of the crowd”, a backhanded compliment if ever there was one, with a minimum of three positions maintained at all times. The TIE received backlash in August from some crypto projects after revealing their most overhyped crypto projects, with Electroneum in particular taking umbrage to the rankings, but investors likely won’t care who gets upset as long as the algorithm can land them massive returns. The question is, would you trust Twitter with your money?