Thomson Reuters has added bitcoin sentiment to its financial data feeds that are used by professional traders around the world. While bitcoin and its crypto asset cousins have mainly become a phenomena among individual retail investors, the rollout shows one of the ways that digital tokens are gradually entering the world of institutional investing.
Quant traders use sentiment data and indexes to look for market signals and build financial models, for example. Bitcoin sentiment was part of an upgrade of Thomson Reuters’ six-year-old data feed in partnership with MarketPsych Data, which analyzes some 2,000 news and 800 financial social media sites. The company also widened its sentiment coverage for national fixed-income securities and stock market indexes as part of the upgrade, and expanded it for things like currencies and agricultural commodities.
While the latest release wasn’t just about adding a quantitative gauge of the crypto world’s mood, Austin Burkett, global head of quant and feeds at Thomson Reuters, said the bitcoin feed was added based conversations with the company’s customers. Thomson Reuters also provides prices for bitcoin, ethereum, litecoin, ripple, and bitcoin cash on its Eikon desktop platform, which is used by bank and hedge fund traders.
Sentiment data could be one of the better ways to gauge the mania taking place in crypto assets. Yale economics professor and Nobel prize winner Robert Shiller has said it’s just about impossible to figure out a fundamental valuation (paywall) for bitcoin, which he described in the New York Times as “fascinating from a psychological and neurological” standpoint, but not “grounded in solid economics.” Crypto has been captivated the news and social media cycle, which suggests that a closer analysis of these signals could be one of the better ways to understand what’s taking place in digital asset markets.