Is the price of Bitcoin correlated to it's Google searches?
According to SEMrush, a search engine marketing agency, the price of Bitcoin has a 91% correlation to it's volume of Google searches.
What does that mean?
It means that recently the number of Google searches for "Bitcoin" go up and down with the price of Bitcoin.
That probably isn't that surprising when you really think about it as you would expect that as the price goes higher more and more people are interested in it and as it goes down people are less interested.
Either way, it is an interesting talking point.
How was this study conducted?
SEMrush drew from a database of 120 million US keyword searches that were linked to Bitcoin or Bitcoin related terms.
Bitcoin-related searches being searches like:
"Bitcoin"
"Bitcoin news"
"Bitcoin price"
"Bitcoin value"
The total number of Bitcoin and Bitcoin related searches was estimated to be around 51,400,000 over the course of the last year.
According to the data, the price of Bitcoin in US dollars rose and fell largely in tandem with the number of search requests.
In fact, it moved in tandem roughly 91% of the time.
Is the study merely confirming the obvious?
Possibly.
As mentioned above, it seems fairly obvious that as Bitcoin becomes more expensive, more people tend to search for it online to see how it is doing.
When it is going down or standing still the searches tend to go down and mimic that price action, which would seem fairly intuitive.
Either way though, it is interesting to note the correlation and see that the actual numbers support what me might have already been assuming to be the case.
Some statistics:
Bitcoin searches have gone up 450% since April of 2017.
During that time the price of Bitcoin went from roughly $1,076 to a high of roughly $5,000 just a few weeks ago.
Since June 2017, the number of searches for Ethereum (another virtual currency) is roughly equal to the number of searches for Bitcoin.
Currently, Bitcoin is trading around $4,024 per coin.
The Million Dollar Question:
Do these searches lead or trail the price of Bitcoin?
Wouldn't it be great if we could use Google searches as a predictor of price using this data going forward?
It would be beyond great!
Sadly, that likely won't be the case as it wasn't stated whether this data predicted or trailed the price of Bitcoin.
However, it is probably safe to say that the most likely answer is that it trails the price of Bitcoin, likely for some of the reasons stated above.
Thanks for reading and hope you found this study at least somewhat interesting like I did.
Stay informed my friends.
Sources:
http://www.businessinsider.com/bitcoin-price-correlation-google-search-2017-9
Image Sources:
http://www.businessinsider.com/bitcoin-price-correlation-google-search-2017-9
Follow me: @jrcornel
Hi ,
Thanks for the great content
Thank you for posting @jrcornel.
Steemians enjoy your articles related to Bitcoin.
Interesting study.
All the best. Cheers.
+5
Thank you @shla-rafia. How have you been?
All the best to you. Cheers.
Ups and downs, all the best to you too!
Mhhh so we have to choose; Search all Day for topics about btc or write new blogs and comments on steem. I prefer use steem and make this BIG.
Its up to us to add value and benefit!!
Great point. I have already seen the number of influencers arriving here rising pretty significantly over the past few months. Now if they could just bring their followings with them...
Yes @keiserreport announced on air on RT 7/20/17 that they joined Steemit (their account was created 6/17/17). Stacy or Max check in about once or twice a week so they have not kept a big presence here but it is a start (31 posts, 103 comments to date). Hopefully, that will grow!
I believe it does, and Im even more surprised to find out what countries lead in bitcoin searches
Pretty awesome if you ask me!!
I think it is
I believe that google searches can potentially be a proxy for interest in bitcoin. That being said, I think it is too small to make meaningful differences (when I say meaningful, I mean, how can we, as bitcoin investors/traders/whatever actually make buying and selling decisions based on this information). Here's an idea to supplement your research to create a more powerful proxy: check out search terms such as "buy bitcoin" in google trends to see how that changes over time. I imagine people who search things like that are ordinary folks trying to get some bitcoin. I don't actually think we've quite gotten to the point yet where people who've never even heard of coinbase are trying to buy bitcoin (less than 1% of 1% of internet users use bitcoin).
I feel as though it would only be a vaguely valid correlation in BTC's early years of growth. It would be interesting to see in a few more years, whether BTC settles into stability or if it rockets/sinks.
Yes, the more data we have to go off of the better. So far, there is a pretty strong correlation.
Good point, this type of effect is likely conditional on stage.
Great concept but you are right we need to know if it is the lead or the trail. I'm thinking that once people buy in they are very interested in what is happening with BTC so most likely the latter or at least a mix of interest from both sides lead and trail!
Yea, unfortunately it is likely the latter as it probably trails the price. However, perhaps it should be monitored more closely to see if there are any possibly predictors in that trend. :)
Thanks for the insights - I try to keep informed! Currently too much smell of Beer around me lol
Haha I hope it isn't 10 am over there like it is here. ;)
nope - you can check my Oktoberfest series - but be aware the recent one is nothing for weak personalities lol - thanks for taking time to reply
"If you torture the data long enough, it will confess."