Bitcoin Investment Strategies Based on Google Trends and AI Models

Authors

  • Raúl Gómez Martínez Universidad Rey Juan Carlos
  • Juan Gabriel Martínez Navalón Universidad Rey Juan Carlos
  • Camilo Prado Román Universidad Rey Juan Carlos

DOI:

https://doi.org/10.51698/tripodos.2022.52p129-141

Keywords:

bitcoin, investors’ mood, Google Trends, artificial intelligence, algorithmic trading systems

Abstract

The evolution of the price of bitcoin has captured the attention of analysts in recent years. But how can a cryptocurrency be valued? Given that the price is linked to expectations, we propose, in this paper, to predict the trend of bitcoin using Google Trends as an explanatory variable. To do so, we develop two alternative algorithmic trading systems that buy or sell bitcoin depending on whether the searches for this term in Google increase or decrease. The approach is powered using artificial intelligence. The results of these trading systems are positive and show that trading strategies can be implemented based on investors’ mood about an asset, in this case measured through Google Trends. The use of artificial intelligence in trading is new and this is an example of its potential.

Author Biography

Raúl Gómez Martínez, Universidad Rey Juan Carlos

Formación: Doctorado en Economía de la Empresa y Finanzas por la Universidad Rey Juan Carlos con "sobresaliente cum laude".Experiencia Profesional: Desde 1997 colabora como consultor con las principales instituciones financieras nacionales tanto en España como en sus centros en el extranjero, principalmente en proyectos relacionados con Mercados Financieros, Aseguramiento de Calidad Sw y Big Data & Analytics. Desde junio de 2015 hasta diciembre de 2017 fue director general de la empresa tecnológica Apara y desde enero de 2017 es socio fundador de InvestMood Fintech.Experiencia Docente: Desde el año 2007 imparte asignaturas de finanzas, en grado y máster, como Valoración y Adquisición de Empresas, Mercados Financieros, Productos Financieros, Dirección Financiera, etc.Investigación: Coordina la línea de investigación "Economía Emocional" en el grupo de Investigación M&BE Research y participa en proyectos de investigación con varios artículos publicados en revistas científicas, además de participaciones en seminarios y congresos donde ha obtenido diversos premios. A destacar:- Premio BME 2014 y 2017 al mejor trabajo de investigación sobre mercados financieros.- Gómez, R., Prado, M., & Plaza, P. (2019) Big Data Algorithmic Trading Systems Based on Investors' Mood, Journal of Behavioral Finance, 20:2, 227-238- Gómez, R. & Prado, C. (2014). Sentimiento del inversor, selecciones nacionales de fútbol y su influencia sobre sus índices nacionales. Revista Europea De Dirección y Economía De La Empresa, 23(3), 99-114.

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Published

2022-06-30

How to Cite

Gómez Martínez, R., Martínez Navalón, J. G., & Prado Román, C. (2022). Bitcoin Investment Strategies Based on Google Trends and AI Models. Tripodos, (52), 129-141. https://doi.org/10.51698/tripodos.2022.52p129-141

Issue

No. 52 (2022): Media and Mental Health

Section

Fundamentals

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