How to explain google trends vs BTC/USD ratio?

[phoenix1]

I think it's pretty safe to assume there are not many new entrant to this market right now ... the only volume is 'whales' who are clearly HNW individuals painting the tape.
WHEN there is a BTC economy to underpin price a new cycle can start. Until then, it's just greed and manipulation.

[Walsoraj]

There is a strong correlation between number of people twerking and btc price. It is safe to assume causation at this point, imo.

Since the series contains a lot of information you can determine causation through finding a time-shifted correlation peak.

Gox leads Google Trend.

This has been long established.

some of your posts are perplexing. Are you a time-traveler? If so, what year are you from?

Yeah, I'm from 2011... We had all these conversations back then.

You are traveling the wrong way, fool.

[BitcoinAshley]

How could we explain this spread between btc price and google trends.

The first time I learned about the word twerking I did what many others did and googled it.  

I've heard the word twerking hundreds of times since and occasionally have seen it occur but I've not once done a search on it in ever since.

So even though there is (presumably) more twerking occuring today than there was yesterday, the frequency of Google searching for twerking is down today versus yesterday.

So similarly, for Bitcoin, Google trends will spike when there is an influx of those who are becoming aware of bitcoin for the first time, but Google trends can drop even though the actual subject of the term is seeing an increase in activity.

But because financial speculation discussion (due to a rising exchange rate) is the primary reason people are learning of the term "bitcoin", the google trends will lag, not lead, the exchange rate.  Thus Google searching for the term bitcoin can drop significantly without the exchange rate falling as well.

Excellent explanation. Although I feel like we've covered this subject on this subforum many times previously... the dead horse picture was quite appropriate.

[001sonkit]

Try looking into the logged graph perhaps? 

[nrd525]

Log won't work (as you'd need to log both the price and the trend) - it'd just make the increases look slower.  Unless you're proposing an exponential relationship between the two?  That is possible, but proving exponential correlation in my experience (social sciences) can be questionable as there are so many different ways to test if you go beyond linear correlation.

I've been puzzled by the fact that BTC price hasn't gone down as the Google trends might predict a price of closer to $45 (if you compare search trends with Jan/Feb 2013).  Maybe it has crossed a threshold where it is self-sustaining (for instance there is consistent mainstream media stories on it)?

I'm not entirely convinced that MtGox prices would be the main driver for search activity.  There could be another cause that is behind both.

[jamesc760]

No!