A new portfolio based on tweet vibes went live on eToro. With an AI system searching thoroughly through 850000000 tweets a day, the eToro product carefully accesses and marks an optimal coin portfolio, based on Twitter sentiment.
The new financial tool, dubbed The TIE-LongOnly CopyPortfolio, was live on eToro’s trading platform with a minimum investment requirement of $2000; the portfolio held five different crypto assets- 47.24% stake in DASH; 23.92% EOS; 21.86% XRP; 5.01% MIOTA; and 1.97% ETC, and declared monthly rebalance upon the underlying algorithm.
However, the TIE’s level of real-time poise was only open to hedge fund private clients and their managers, who could access and then examine the Twitter sentiment, with the Social Markets Analytics (SMA) data stream, which the TIE uses. Now, the new portfolio would allow everyone with an eToro account to tap straight into the data stream.
The TIE is an off-shoot of SMA, and Frank is an SMA investor. SMA licenses Twitter’s ‘firehose’ directly from Twitter.
The TIE-LongOnly CopyPortfolio is a partnership project between eToro exchange and The TIE data analysis firm. The TIE sources their tweets from Social Markets Analytics.
The Tie-LongOnly portfolio’s algorithms select between 13 different coins: ETH, BTC, XRP, BCH, IOTA, DASH, NEO, LTC, ETC, EOS, ZEC, XLM, and ADA.
A daunting challenge of using Twitter as the data source is separating the real content from fake, either because of numerous bot accounts or designated shills or both.
And even before, the algorithm eliminates bots, and way before it disintegrates whether a tweet gives a positive or negative sentiment, it must decipher whether the tweet is about crypto or not. Once these problems are sorted, the actual sentiment-analysis can begin where a single Tweet sentiment is compared against multiple of its kinds. They are never compared against other coins.
Joshua Frank, CEO of The TIE, stated,
“We’re actually eliminating about 90% of tweets because we think they’re coming from bots or people trying to manipulate the market. We have to identify and assess the relevance of each individual tweet.”
“Crypto remains an asset class driven by the wisdom of the crowd,” while commenting on the fact that Twitter is the best source of intel for the crypto market.
The CEO added:
“Kind of the epicenter of the crypto universe. There’s nothing fundamentally driving the value of crypto. There’s no earnings, there’s no dividends, there’s no revenue.”
The absence of the normal metrics (which drives the stock market values) in the crypto market prompts public outlook like those produced on Twitter to take a key role in deciding the value of different crypto assets.
The project may seem very risky, but the TIE plans to establish tweet sentiment portfolios for investors of uneasy constitutions, too. One of the products in the crafts takes out 50% long and 50% short positions, so the net vulnerability to the market is nullified.
Harold joined our team as a reporter while still studying, a job that suited him perfectly as he always prefers working on the stock analysis. He has a passion for new technologies, economics, finance, and is always keen to learn more about the ever-changing world of journalism. Harold also likes to explore new things in his free time.