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At this time last, year, Bitcoin was hovering below the $5,000 mark unaware that in a couple of months it would (much like Carrot Top in the 90s) become a sensation virtually overnight before eventually entering a downward spiral.
Bitcoin hasn’t reached Andy Dick levels of irrelevancy quite yet, and much like how Carrot Top still draws crowds in Las Vegas, there are still plenty of people who have taken the advice of Journey and haven’t stopped believing in Bitcoin.
The price of the cryptocurrency has been on a gradually declining rollercoaster since the start of the year, and despite the best efforts of alleged experts to get a handle on it, no one really seems to know what the hell is going on.
I’ve seen countless explanations trying to point to the key factors that led to the rise of the price of Bitcoin in the first place, but according to one analyst, the answer could be much less complex than what some people might think.
According to CNBC, economist Joost van der Burgt thinks the price of bitcoin seems to have a large correlation with a very simple indicator: Google searches.
New research by economist Joost van der Burgt, a policy advisor at the Dutch National Bank, compared bitcoin price movements to Google searches for the cryptocurrency. The result? A nearly perfect correlation until bitcoin's price started to plunge in early 2018.#Google #btc pic.twitter.com/yAZ83EtRrw
— 拓汇 (@Trex66594145) August 31, 2018
He explained the results of his research, saying.
“Every time Bitcoin was in the news, be it positive or negative, the price went up accordingly,” van der Burgt said in a phone interview with CNBC on Wednesday.
Van der Burgt said the correlation between Google searches for Bitcoin and the cryptocurrency’s price was almost a “perfect match” until the end of 2017. He said it might not be a coincidence that was also when bitcoin futures markets were introduced.
“My take on it is that because of the introduction of futures, that might have deflated the bubble before it got to a level where it might burst completely.”
It’s worth noting he also looked for correlations between searches and the value of other assets but found nothing came close to this discovery.
Of course, correlation doesn’t equal causation but it’s still a pretty interesting stat.