Thomson Reuters is arguably one of the most authoritative news and data sources in existence. Many news and media outlets subscribe to the Reuters data feed, from which they get their story ideas and facts. According to an announcement on June 13, Reuters has partnered with MarketPsych Data LLC to expand its data profile to include sentiment data on the top 100 cryptocurrencies using patented natural language processing software.
Back in March 2018, Thomson Reuters launched a Bitcoin sentiment data feed. Based on the company’s determination that the feed was successful, they have expanded the dataset. The new data feed, MarketPsych Indices (TRMI), uses machine learning and content analysis to predict overall sentiment about a list of 100 top cryptocurrencies. Using this data, it provides a measure of market sentiment to predict the directionality of price trends.
MarketPsych Data LLC engages in data analysis and quantitative behavioral science. The new index, TRMI analyzes emotional and topical items in the news and on social media to identify drivers for market participation and cryptocurrency price action.
A Reuters survey released in April 2018 showed that 20% of financial firms may trade in cryptocurrencies over the next 3-12 months. Until now, this market has been lacking in some of the tools that are used in more traditional markets, particularly tools to measure market sentiment. As online communications regarding various digital assets may have a direct impact on prices, this new tool will provide trading insight to traders to give them an edge over other traders who do not have access. For example, a spike in the use of terms like FOMO or HODL may be used to anticipate future changes in the market.
In this way, sentiment analysis of the cryptocurrency market may be used to predict price movements for specific digital coins, and when taking the overall sentiment of the top 100 cryptocurrencies as a whole, it may be used to predict major trends across the market as a whole.
The TRMI Cryptocurrency Sentiment package, TRMI 3.1 will monitor over 2,000 news and social media websites in real-time, and users may drill down to 43 themes and sentiments based on data going back to 2009. The package includes visualization tools to help with the predictive value of the data. These include regression and cross-sectional rotation models of influential themes and actionable strategies.
Thomson Reuters has added TRMI 3.1 to its suite of cross-asset solutions and end-to-end trading insights for all asset classes. In addition to insights, Reuters has released REDI, a multi-asset exchange with intelligent trading technology incorporated into the platform. Users are able trade Bitcoin futures on REDI, from both the Cboe and CME. Cryptocurrency price data is available through the Elektron Data Platform, another product offering from Reuters.
Customers with access to TRMI will be able to incorporate the data into both quantitative and qualitative analysis when making cryptocurrency investment decisions. The success or failure of this new platform will depend on its natural language processing capabilities, using artificial intelligence, and the resulting data that it provides. If successful, it may add a new dimension to the way that digital assets are traded.
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