What will happen to Bitcoin? Just Google it.
As social distancing and self-quarantine rules stay in place for most of us, figures suggest online media consumption has gone up between 50% and 70%, and streaming up 12%. Search for Bitcoin on both Google and its Chinese counterpart Baidu have gone up as well, but not for the reason you might expect.
According to a report cited by Cointelegraph, Baidu has seen a jump in searches for “Bitcoin” (BTC), with the data showing an increase of 183% during February and March 2020. During a similar time period, this Google Trends chart shows how the global search volume for “Bitcoin” jumped in the last 90 days.
Back in 2017 when Bitcoin reached its all time high, searches for Bitcoin also went through the roof, leading SEMrush to conclude the price of BTC had a 91% correlation to search traffic. That’s means the increase in recent search traffic could spell even more volatility than usual in the weeks ahead.
So, what’s going on?
The mindset of the Bitcoin market
Before we look at what’s driving the interest in Bitcoin, it’s helpful to take a look at the nature of the interest. Are people just trying to find out more about Bitcoin or are they interested in trading? Again, Google Trends shows us the way.
Crypto traders, or more probably people looking to get into trading Bitcoin, appear to show more interest in buying Bitcoin rather than selling it. At least, that’s what the numbers show when you look at the search statistics comparing the search phrase “should I buy Bitcoin” and compare that to “should I sell Bitcoin”.
The two main developments that are most likely influencing increase in Bitcoin search volume is the meltdown of global markets and the Bitcoin Halving event that took place early May.
The global economy
If you look back the first Google chart, you see a spike in mid-March, just as the global economy took a huge downturn and we saw a huge sell-off in stock markets across assets. Bitcoin is increasingly being considered a safe haven or at least a deflationary asset so when traditional markets tumble, you can expect a surge in Bitcoin buying interest. Bitcoin did suffer a huge loss at the time but perhaps it was exactly that price drop which got more people interested in buying BTC “at a discount”.
Even though gold took a hit during the same time, it is a long-established safe haven and hedge against inflation and overlaying search volume for gold with Bitcoin reveals a similar jump at around the same time. From this we can infer with some degree of confidence that both search volume increases came from the same trading idea and notion of both assets being a hedge against inflation.
So it seems that even when a lot of people have lost employment and face an uncertain economic future, they are still believed that Bitcoin is a way to secure their financial future, taking a bet against the current financial system.
The second spike in Bitcoin’s search volume has everything to do with the Bitcoin Halving event. Comparing the regular Bitcoin search volume over last 30 days with the search term “Bitcoin Halving”, reveals the two spiked at around the same time.
The red line indicates ‘Bitcoin Halving” and as you can see the interest in the event is practically non-existing right up until the week prior to the event. As more crypto media started to report on the event, and many companies and apps displayed countdown banners to build up excitement, search volume for both increased.
So, we’ve seen that the Bitcoin market is just as volatile as traditional finance when the world is hit by a global pandemic. But the recovery has been swift, and it seems more people are starting to get in on the idea that HODLing for the future, and buying in when the price hits a low, is one way to use cryptocurrencies as a way to hedge against global market uncertainties.
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