Can Individual Human Financial Behaviour Be Mathematically Modelled? A Case Study of Elon Musk’s Dogecoin Tweets

Abstract

The price of Dogecoin has been influenced by Elon Musk’s tweets on several occasions. Moreover, there are repeating patterns in the Dogecoin prices. However, is there also a pattern to the timing of the tweets? Applying linear regression, we have been able to make the reverse analysis – to use hard financial data (prices) to analyse the human behaviour (tweets) that preceded and influenced the financial data. Selected tweets could be paired thanks to the projections of their timing on the regression line that had been created over the prices. Our model exhibits inaccuracies only in the order of the days. That is surprising, as pump schemes do not usually require such a high level of long-term deterministic timing.

Keywords

• behavioral economics
• cryptocurrencies
• pump-and-dump scheme
• linear regression
• time series analysis