Assessing the impact of network factors and Twitter data on Ethereum's popularity

Abstract

In March 2021, we witnessed a surge in Bitcoin price. The cause seemed to be a tweet by Elon Musk. Are other blockchains as sensitive to social media as Bitcoin? And more precisely, could Ethereum's popularity be explained using social media data?

This work aims to explore the determinants of Ethereum's popularity. We use both data from Etherscan to retrieve the relevant historic Ethereum factors and Twitter data. Our sample consists of data ranging from 2015 to 2022. We use Ordinary Least Squares to assess the relationship between these factors (Ethereum characteristics and Twitter data) and Ethereum's popularity.

Our findings show that Ethereum's popularity—translated here by the number of daily new addresses—is related to the following elements: the Ether (ETH) price, the transaction fees, and the polarity of tweets related to Ethereum.

The results could have multiple practical implications for both researchers and practitioners. First of all, we believe that it will enable readers to better understand the technology of Ethereum and its stake. Secondly, it will help the community identify pointers for anticipating or explaining the popularity of existing or future platforms. And finally, the results could help in understanding the factors facilitating the design of future platforms.