A European Central Bank working paper introduces the Reddit Retail Investor Sentiment Indicator, a daily measure of optimism and pessimism among speculative, online retail investors. Using ChatGPT-5.1, the researchers classified more than eight million posts from investing, cryptocurrency, macroeconomic and commodity-related subreddits between 2015 and April 2026, with 4.16 million high-confidence, investment-related posts retained for the final dataset. The indicator weights positive and negative posts by user engagement and standardizes them against a rolling one-year baseline. It broadly tracks market prices and established sentiment measures while providing more timely and granular signals by asset, portfolio and topic. Changes in the indicator contained statistically significant information for next-day S&P 500 and Bitcoin prices, with the S&P 500 relationship about 3.4 times stronger during market declines than outside downturns. The paper found no significant predictive relationship with aggregate S&P 500 trading volumes and cautioned that Reddit users represent a younger, more speculative cohort rather than the wider retail investor population. A regularly updated version is available through an accompanying online dashboard. The paper presents the indicator as a potential tool for financial stability monitoring, early-warning analysis and research into sentiment-driven market dynamics.
2026-08-24European Central Bank
European Central Bank publishes AI-based Reddit indicator tracking retail investor sentiment
A European Central Bank working paper introduces an AI-based daily indicator derived from more than eight million Reddit posts to track sentiment among speculative retail investors. The measure broadly follows markets and established benchmarks, with changes providing statistically significant information for next-day S&P 500 and Bitcoin prices. Its relationship with S&P 500 returns was stronger during market downturns.