Bitcoin Price and Google Search Connection

Bitcoin Price and Google Search Connection

If you’ve heard about the massive gains being loved by bitcoin recently, then googled the digital currency to see what all the fuss is about, some of the cryptocurrency’s investors may want to thank you.

Bitcoin prices demonstrate a notably high correlation with Google search trends for the word “bitcoin,” according to Chris Burniske, a bitcoin pro who was previously a blockchain analyst at ARK Invest.

In a series of tweets, Burniske speculated that an enhancing price drives interest in bitcoin, and “that interest further drives the price of $BTC,” something he joked was “a virtuous Satoshi cycle,” in reference to Satoshi Nakamoto, the pseudonym used by the mysterious creator, or creators, of bitcoin.

Two/ An enhancing price drives interest in #bitcoin

That interest further drives the price of $BTC.

A virtuous Satoshi cycle ��

The price of a single bitcoin hit a record high of $Four,483.55 on Wednesday, tho’ it subsequently fell Four.2% to trade at $Four,196.99. At current levels, it has more than quadrupled thus far this year, up more than 360%, a budge that has lifted its total size to $68.7 billion, making it larger than Dow component Caterpillar Inc.

Bitcoin’s rally has been among the strongest gains seen of any asset in 2017, albeit Ether—bitcoin’s chief rival, which runs on the Ethereum network—has soared more than Three,800%.

According to Google trends, the search term “bitcoin” is reaching peak popularity in August 2017, while searches for “ethereum” have tapered off. (Bitcoin is in blue in the following chart.)

The growth in bitcoin this year has come alongside growing interest in the overall cryptocurrencies, as well as enhanced regulatory interest and public debates over how it can manage at its current size.

The gains have been so large that major Wall Street banks have commenced to weigh in on the nascent sector. Both Wells Fargo and Goldman Sachs recently published primers on bitcoin for their clients, while one Morgan Stanley analyst called it a poster child for speculation. The investment bank had previously said that in order for bitcoin to rise further—it had been trading around $Two,750 at the time—government regulation would be necessary.

Bitcoin’s evident connection to internet search interest—when combined with its continuing stir into the mainstream—may suggest that prices have almost unlimited upside potential, something some proponents more or less agree with. John McAfee, the founder of his namesake antivirus software company, as well as a former fugitive and sultry cryptocurrency backer, recently tweeted that he would “eat [his] d–k on national television” if bitcoin didn’t hit $500,000 within three years.

Burniske disputed that general idea, noting that three peaks in Google search trends were accompanied by “three of bitcoin’s six price bubbles.”

“The virtuous Satoshi cycle can overheat tho’, as Google search activity divorces from its taut tango with bitcoin’s price,” he tweeted earlier this week.

Burniske defines bitcoin bubbles as the price doubling or more in a 30-day period. That is presently the case, as it was below $Two,000 per bitcoin on July 16. “After every bubble there’s a crash,” he tweeted, with some drops exceeding 90%. However, he added that “those were very different bitcoin markets” [emphasis in original] as they had “thin liquidity, fragile exchanges, and a fraction of the users and investors,” something he suggested could limit downside in the event of another acute downtrend.

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