New Research Links Bitcoin Price Changes to Google Search Activity
A new research examining the relationship between Bitcoin prices, Google searches for the cryptocurrency and the introduction of futures markets has been released by Joost van der Burgt, a fintech policy advisor for De Nederlandsche Bank (the central bank of the Netherlands).
According to the economist, Google searches for Bitcoin and the price of the first cryptocurrency were perfectly correlated until the end of 2017, but went separate ways afterwards.
Image: Source: Joost van der Burgt
In an interview with CNBC he said:
“Every time Bitcoin was in the news, be it positive or negative, the price went up accordingly,”
What’s interesting, says van der Burgt, this coincided with the introduction of regulated Bitcoin futures markets on the Chicago Board Options Exchange (Cboe) and the Chicago Mercantile Exchange (CME).
“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.”
Separate research published in May by researchers at the San Francisco Federal Reserve also found Bitcoin’s price dive was linked to the launch of a futures markets.
Van der Burgt also compared Google searches for other popular assets like gold to their prices and found no correlation. He believes public awareness about an investment can help drive its prices to sky-high levels.
“If the buzz is everywhere, it doesn’t matter exactly what the news is about… nobody wants to miss out and everybody’s trying to get a piece of it,” insists Joost van der Burgt.
He added that Bitcoin’s price movements closely traced the beginning stages of a bubble, but fell short of the panic phase.
“It wasn’t really panic, it was more of a scare,” Van der Burgt said.
As reported by ForkLog earlier this week, Cboe Global Markets, which in December last year made Bitcoin futures available for trading on the Cboe Futures Exchange (CFE), is now preparing to launch Ethereum (ETH) futures which could go live before the end of the year.
Bitcoin has been in bullish mood over the weekend, breaking the $7,200 mark on Saturday.
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