Thomas Reuters Launching New Bitcoin Data Feed
CoinDesk reported on Monday that Thomson Reuters announced that it was launching a new Bitcoin data feed that would give investors information regarding market sentiment about Bitcoin and cryptocurrencies.
AI to Analyze Data
The Bitcoin sentiment data feed will utilize AI – Artificial Intelligence – to assess and analyze more than 400 data sources including news articles and social media feeds for information that can be used by investors.
This sentiment data feed is a part of the agency’s suite of investment tools called MarketPsych Indices. These are tools used to analyze anything, ranging from sovereign bonds to companies.
The new Bitcoin sentiment analyzing tool uses factors such as “greed” and “fear” to identify trading opportunities. When a chosen trait reaches a certain level or changes in a particular manner, then the investor can buy or sell, short-sell or hedge, depending.
Using AI to Invest
This data sentiment feed is a part of a larger trend emerging among companies that employ Artificial Intelligence services, where they are using their existing analytics tools to help with cryptocurrency investing.
Richard Peterson is the CEO of MarketPsyche, the company that created the technology that is being used in the Thomas Reuters Bitcoin sentiment feed, as well as the author of the book “Trading on Sentiment: The Power of Minds over Markets”. According to him, all sentiment analyzing products employ Bayesian Filters, which use lessons that were taught to computers by people.
He explained that the AI learns over time which relationships of words and sentences represent what sentiments. For example, hope and worry sentiments that can be used to either speed up or sell off an investment. And once trends are created with online conversations, this data can be used to identify investment indicators.
Thomas Reuters has been tracking cryptocurrencies since 2014, using its Eikon trading software. In 2016, the company presented numerous early stage projects using blockchain tech. However, this is the first time that the company has formally developed tools meant specifically to analyze the cryptocurrency market.
The project is still in its nascent stage as the machine needs to be taught the importance of context. The machine needs to be able to identify and then analyze words related to cryptocurrency in the right context with greater accuracy.
At the end of the day, feelings will be tracked and then put into context so that it is relevant for cryptocurrencies.