Islamic view towards Bitcoin

Abstract

This paper proposes to analyze the agent behavior by means of big data extracted from the search engine « Google trends » and Twitter API to visualize the emotions and the manner of thinking about « Bitcoin » in the Islamic context. Two kinds of sentiment measures are constructed. The first is based on the search query of the word « Bitcoin » with religious connotation all over the world from 14/04/2017 to 14/04/2018 in weekly frequency. The second is built on twitter data from 03/04/2018 to 13/04/2018, by using a Bayesian machine learning device exploiting deep natural language processing modules to assign emotions and sentiment orientations. In the next step, the Granger causality analysis is used to investigate the hypothesis that this sentiment causes the volatility and the returns of « Bitcoin ». The results show that, at a first-level that twitter users of the word « Islamic Bitcoin » improve positive sentiment. Secondly, the Twitter sentiment measure has a significant effect on lagged Bitcoin returns and volatility. Furthermore, this sentimental variable Granger causes Bitcoin returns and volatility. This study contributes to the literature by studying the influence of the doctrinal view towards Bitcoin on his prices dynamics. Knowing that Bitcoin is a new financial asset and there is a large debate on his compliance with shariah.

Keywords

• bitcoin
• microblogging
• sentiment analysis
• text minig
• islamic finance