cryptocurrency: Making sense of chaos? Algos scour social media for clues to crypto move…

LONDON: After months of relative calm in cryptocurrency markets, bitcoin exploded back into life in April with its sharpest price jump in over a year – but few people could convincingly explain why.

The 20% leap focused investors’ attention on one of the enduring mysteries of cryptocurrencies: what moves the price of an emerging asset in an opaque, largely unregulated market?

For some, the answer lies on social media. Hedge funds and asset managers seeking an edge are training computers to scrape social media sites for triggers that could move the price of digital currencies.

Their goal: crafting algorithms capable of picking out price “signals” from the background noise of sites ranging from Reddit and WeChat to Twitter and Telegram.

Many investors already use computer models to identify, and trade, price differences across hundreds of cryptocurrency trading exchanges.

But with opportunities for arbitrage narrowing as the nascent sector develops, big players are increasingly…