YouTube crypto channels and other social media platforms play a crucial role in disseminating information and shaping retail investor sentiment. According to a recent analysis conducted by crypto research firm Delphi Digital, YouTube crypto channels are a key source of information for retail investors.
The data tracked by Delphi Digital indicates that the popularity and viewership of these channels can serve as a sentiment indicator, potentially predicting major market tops and bottoms. In a note to clients on Wednesday, Delphi research analyst Priyansh Patel acknowledged that while these metrics are not flawless, they provide valuable insights into market trends and the impact of retail participation.
“Analyzing the relationship between the average weekly views and subscriber growth/decline of popular crypto-related YouTube channels ought to shed some more color on retail participation,” Patel said.
Retail investors, often the last to enter or exit the market, heavily rely on freely available sources such as YouTube and blogs for information before making investment decisions. Therefore, an increase in viewership for YouTube channels can be viewed as a contrary indicator, similar to Google search trends or investor sentiment surveys.
Experienced traders and professional money managers utilize sentiment indicators focused on retail investors as a contrarian approach. They tend to buy when retail sentiment is overly pessimistic and sell when sentiment becomes overly optimistic.
Delphi Digital’s data tracking reveals a historical correlation between the weekly change in views and subscriber counts of popular channels, including The Moon, BitBoy Crypto, DataDash, EllioTrades Crypto, and Ivan on Tech, with the boom-bust cycles of the crypto market. For instance, during the first significant peak above $60,000 in early 2021, both “The Moon” and “Ivan on Tech” experienced a surge in their subscriber counts and viewership. However, as Bitcoin swiftly declined to $30,000, the channels’ metrics followed suit.
Interestingly, despite Bitcoin’s year-to-date gain of over 70%, both channels have yet to experience a significant boost in their subscriber base and viewership. This indicates that a large portion of the general population is still cautious and hesitant due to the lingering effects of last year’s harsh bear market.
Delphi Digital suggests that analyzing popular social media platforms, such as Twitter accounts, SubReddits, blogs, and podcasts, can yield similar insights. These trends across various platforms can collectively provide a comprehensive understanding of retail sentiment and potentially assist in forecasting market movements.
It is worth noting that social media platforms have also become an attractive choice for scammers to promote their fake projects. Earlier this year, the European Consumer Organization (BEUC) released a report accusing leading social media platforms including Instagram, TikTok, Twitter, and YouTube of enabling scams related to digital assets.
