European Scientific Journal November 2019 edition Vol.15, No.31 ISSN: 1857 – 7881 (Print) e - ISSN 1857- 7431 52 Empirical Analysis Тowards the Effect of Social Media on Cryptocurrency Price and Volume Tiran Rothman, Management School, Wizo Haifa Academic College, Haifa, Israel Chen Yakar, Arison School of Business, Interdisciplinary Center (IDC), Herzliya, Israel Doi:10.19044/esj.2019.v15n31p52 URL:http://dx.doi.org/10.19044/esj.2019.v15n31p52 Abstract Bitcoin’s value is highly dependent on the communities that use it. This network effect is true for all new technologies. Today’s online communities are so large in population that both the Facebook user and Youtuber populations have surpassed the Chinese population. We take a big data approach using millions of samples of posts from Twitter, Telegram, and Reddit to study how and if social media platforms, the epitome of online communities, affect Bitcoin’s price and volume as well as the price and volume of fifteen other top cryptocurrencies. We work in collaboration with Solume, a data centered fin-tech startup, as well as with Sentistrength, an opinion mining tool developed by researchers in the UK, to classify the sentiment of the millions of posts we study. We collected millions of posts related to 16 cryptocurrencies from November 2017 through August 2018 on an hourly basis and explore social media volume sentiment effect on these cryptocurrencies. Findings confirm that volumes of exchanged posts may predict the fluctuations of Bitcoin’s price but mainly, they predict volume. We also find that Reddit and Telegram posts have greater impact on Bitcoin volume than Twitter. Results indicate that information about the use of social media platforms can assist in tracking real world behavior and may even predict real financial market trends. Keywords: Behavioral Finance, Cryptocurrency, Social Media, Sentiment Analysis Introduction Bitcoin represents a radical change in financial systems, attracting a large number of users and a lot of media attention. The cryptocurrency was created by an unidentified programmer under the name Satoshi Nakamoto, who introduced it on October 31, 2008 and released it as open-source software