Bitcoin Forum

At least the correlation seems pretty good. And yes, I know that correlation does not equal causality, but still, this further reinforces the fact that Bitcoin needs an influx of new businesses / users to thrive.

http://i54.tinypic.com/15ouree.png

The image is MtGox prices superimposed on google trends searching for 'bitcoin'. Blue line is Google Trends, black thin line MtGox USD/BTC prices.

wow thats interesting.... it almost matches the value

I'm sure there was another topic about this, 2 months ago :)

im usually skeptical of posts with these types of comparisons but that is very interesting indeed

Are you saying that bitcoin is now in control of google trends? That is quite shocking indeed!  :o

If ones wants to put any stock in that.. you then have to assume fresh blood (money) is needed to prop
up this system. Also known as a ponzi scheme. Hate to say it but that seems to be the case. This is not
a closed system. USD(whatever) is being taken out of the system and not enough is coming back in. This
might not always be the case but it sure does feel like it.

Wow. I am the negative. I am the troll.

So...the price of Bitcoins is a valueable predictor of Google trends for bitcoins...

sweet!

Are we looking at the same graph? I'm not seeing any 'lag' at all, in fact the one I'm seeing seems to shows the price following the trend. Comparing individual peaks is a little dumb because the google data is only polled a few times a month

Also, this is google searches for 'bitcoin'. Who searches for 'bitcoin' on google? Someone who doesn't know a lot about bitcoin. You seem to be suggesting that these people woke up and thought "hey, that thing I have never heard of is doing great. I should google it and find out what it is!".
There is a simpler explanation as to why the price of bitcoin correlates so well to the number of new users: fcmatt is right, it's a ponzi scheme.

It is not a Ponzi scheme, it is a currency market.  What drives a currency market is imports and exports.  It is really difficult to see the importing and exporting to and from the bitcoin economy, but it happens.  If a miner wants to use the bitcoins he mined to pay his power bill, he has to exchange them for USD or Euros because the power company doesn't accept bitcoins as payment.  This means that the miner is importing power into the bitcoin economy, which drives the bitcoin's price down.  When Joe Average wants to buy some organic coffee from so-and-so bitcoin vender, they have to go to buy bitcoins before they can make this transaction.  This is an export, which drives bitcoin's price up.  Also, if you buy something in USD then sell it in bitcoins to a bitcoin miner, you are still importing.  Likewise, if you buy something in bitcoins then sell it for USD you are exporting.  When imports matches exports, you'll have a stable currency.

I was looking at this the other day and was planning on doing an overlay myself, but I just haven't got around to it.

The important question I really need to know is: Do the dates line up correctly?

This.  Why does the google trends chart end before the BTC value chart?  Seems like you moved the graphs to match, when the trends is actually lagging behind the price quite a bit.

I do not think we are there yet. Thus, to me, the ponzi scheme feel right now. I understand what you are
getting at. It makes sense for a mature market. Maybe in time. But for someone to hold onto BTC right now
without immediately using it is a great way to watch your money go up in smoke. Not enough fresh money
is coming in to support the current price (later ponzi scheme people). The early ones had their chance to
get out ahead.

This is all just my feelings at this moment in time. I did not sit here considering it for hours. It is a bearish
feeling I admit. A year from now anything can and will happen.

Because the end of August & September data is not in Google trends yet. http://www.google.de/trends?q=bitcoin&ctab=0&geo=all&date=ytd&sort=0

Ah, ok, that makes sense.  They seem to be matched up well then.

Sorry for the late reply, have to get some actual work done too :) As stated earlier, the google trends latest data isn't out yet. I'm not saying at all that this would be a scientifically valid way of saying that they are correlated, it was just an interesting observation. If there is a way of exporting the google trends values as numbers, then some actual scientific correlations could be done.

Just trying to convey the message that people are interested in the wrong things, it's getting new users for the currency that matters in the exchange rate *at the moment*. Later on, when all Bitcoins have been mined, it is a different story -- now, people are selling the coins that are mined straight away, and thus, new money needs to flow in, or the exchange rate drops. It should stabilize when they have been mined, though.

So this means that we can predit the Google Trends based on BTC price? Can we speculate on Google Trends?

I can't wait for more dealers to accept GoogleTrendCoin.

When a ponzi scheme looses momentum and collapses it is irrecoverably dead. Bitcoin is a popular commodity whose immediate usefulness is low and its popularity rises and falls as any fashionable commodity. But the long term trend continues to accelerate along with its usefulness, while its price remains just as volatile.

Google trend thread revisited!