Correlating with Search Trends

[nrd525]

Has anyone tried to correlate bitcoin/usd price with search trends? 

Google has some neat search trends on "Google Insights for Search".

http://www.google.com/insights/search/
(if it lets me post a url)

My guess is that a lot of demand is fueled by fame.  I only found out about bitcoin a week ago via slashdot.


Looking at May 21-24, there was a small lull in Google Search activity for the keyword "bitcoin", but bitcoin price went up all these four days.

It is possible that there is a time lag.

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[Bazil]

Looking at May 21-24, there was a small lull in Google Search activity for the keyword "bitcoin", but bitcoin price went up all these four days.

It is possible that there is a time lag.

Memorial day week end in the US,  half the people interested were out barbecuing instead.

[nrd525]

May 24 was the day before Memorial Weekend.  May 21-23 was not.

[Bazil]

May 24 was the day before Memorial Weekend.  May 21-23 was not.

People were thinking about/preparing what they were going to do for the weekend.  Was a really slow work week for me, as I'm sure it was for a lot of people.

[nrd525]

Let's see if I can post images:


Bitcoin price graph from MtGox.


Google Search Trends for the past 30 days for "bitcoin".

[nrd525]

Bitcoin prices for the past year (MtGox, US dollars)


Google searches for bitcoin past year.

[nrd525]

It isn't perfect. But I'm seeing strong correlation.

This correlation would improve if you averaged the google searches over a week (typically google searches drop 20-30% over the weekend), or several days.  There might be a very small delayed effect between searches and conversions into bitcoin buyers (ex 1 day).   Or maybe there might be no delay at all for buying the coins (and a much larger delay for mining - especially on a major scale if you have to buy a gpu).