Google search statistics may affect the price of bitcoin

Co-founder of DataTrek Research, Nick Colas, has come up with a way to determine when is the best time to invest in bitcoin. His theory lies in a certain dependence of the price of bitcoin on the frequency of search queries for the word “bitcoin” and the increase in the number of wallets.

By looking at the search statistics on Google, which accounts for approximately 60 percent of the search market worldwide, you can determine what the price will be. Indeed, the statistics are consistent with the same price trends we've seen over the past 90 days. There were few searches and the price was low, $10,000 to $12,000, down from December's record price of $20,000. Thus, the number of requests definitely shows when the price is low and when it is high.

However, this correlation does not allow us to understand which fact is primary. Has the price increased because Google searches have increased, or is it the other way around?  This question is like the age-old chicken and egg question and may not have an answer. However, looking at how the price of cryptocurrencies fluctuates depending on the news, it would be quite logical to admit that the tail may wag the dog. 

This theory is supported by the fact that when requests were high between Thanksgiving and December 17, the price of bitcoin was $19,843, doubling in two weeks. The increased number of requests has led to an increase in the number of wallets in which bitcoins are stored. But a few days later, the price of bitcoin fell, as did the number of searches.

Mr. Kolas, who owns a quarter of bitcoin despite the price decline, does not think there is any need to panic because the price of bitcoin is still higher than before Thanksgiving and the value is being tested in the long term. You just have to follow the statistics.