Within the crypto world, there are many analysts who try to identify the elements that move the price of Bitcoin up or down. Or, in other words, those who work in to get the key behind one of the most volatile markets in the world. Of course, the price of BTC revolves around the elements that determine the price of any commodity in a competitive market, that is to say the supply and demand of the good in question. However, what elements impact positively or negatively the demand of the criptomoneda, is something that is discussed within the circles specialised in the topic. One of the theories that has caused the greatest stir, is that linking the price of Bitcoin with the amount of searches carried out on Google on the criptomoneda. This attempt to see a relationship between the two figures emerge from the coincidence that was between the two during the bullish rally of the year 2017, when the price of BTC reached a record high at the same time did Google searches on the topic. Searches for Bitcoin on Google in the last few years Graphics of the Bitcoin of the past few years
Contents
What 2017 was a coincidence?
As can be seen in the graphs above, it reaches the peak in the activity of Google users searching for information about the Bitcoin at the same time that the same came to their highs in the final months of 2017. However, the attempt to see a relationship of causality between the trends in the Google search engine and the price of Bitcoin, is refuted when analyzing with more detail the interest generated by the criptomoneda in the finder, and the price of the same in the market. So, when we look at the trend graph of Bitcoin during a period of 90 days, we can observe that the term had a peak of activity on the 26th of June, facing subsequently a fall in the interest around the criptomoneda. Searches for Bitcoin on Google in the last 90 days on the other hand, when we compare the same period of time in the market BTC, we noticed easily that the price of the criptomoneda has experienced a period of absolute instability, with the high and low do not correspond in any way with the figures you provide to us Google Trends, coming to face even a decline in its price at the same time that the interest in the currency reached a peak on the 27th of June. Graphics of the Bitcoin last 3 months
Conclusion
Therefore, but there is a direct relationship between the two statistics, How can we explain the practice match between them during the period around the bullish rally of 2017? The most plausible explanation is the existence of a correlation between these figures, which would not imply that a was a cause of the other, even though they influence each other. That is to say, the increase in the interest of Google users for the Bitcoin and the crypto market would arise essentially due to the coverage in the media is made the same. Therefore, when at the end of 2017, BTC reached a peak, and the eyes of the media were placed on this market, it was normal for a simultaneous increase in the number of people trying to learn more about this criptoactivo. At the same time, an increase in the interest around Bitcoin, it could also lead to an increase in the demand of BTC, thanks to the market entry of new actors after learning about the operation of this product, would decide to invest in it. This would allow us to explain the relationship that exists between the figures that is provided to us by Google and the movements in the crypto market, which, on some occasions, can get to match between if, without this meaning that any and is the direct cause of the other. The following two tabs change content below. Student of International Studies, interested in issues of economy and international politics. Passionate about the progress of the Fourth Industrial Revolution in general and the cryptocurrencies in particular.