We often hear that China has been a major driver of the recent bitcoin price action. Trader Alex Krüger decided to see if the figures from Baidu (China’s version of Google) backed that up.
Does Bitcoin Price Follow Interest Or Vice Versa?
As a non-technical indicator, for those without time or inclination to peruse bitcoin price charts all day, Google trends is… okay.
It’s not exactly scientific; though science has tried (and failed) to reach consensus on whether search interest leads or trails price. It’s hard to read; interest also peaks when prices bottom; and sometimes even ‘experts’ get it very wrong.
But in general, there does tend to be a correlation between interest in Bitcoin on Google trends and BTC price [coin_price].
But China Doesn’t Google. Baidu’s Where It’s At.
However, despite Google’s ongoing attempts to get its icy stranglehold on the entire world, China is still immune to its siren call… thus far, at least.
Recent articles suggest that capital controls from government, and the US/China trade war, are driving Chinese interests back to Bitcoin. But that of course cannot be seen through Google trends. So trader Alex Krüger decided to do some research into China’s Baidu equivalent.
There's been a lot of talk about how China has been the driver behind Bitcoin's move up since the first week of May. So I decided to look into bitcoin Baidu trends (China's Google). China's bitcoin popularity has definitively been on the rise. ? pic.twitter.com/kQ38WJfGjp
— Alex Krüger (@krugermacro) June 3, 2019
(Bai)du Tell Me What The Results Were
Krüger found that ‘Bitcoin’ searches on Baidu largely followed the pattern of Google searches across the rest of the world. Peaks occurred similarly and on the same dates, either during or following price breakouts.
In fact, the level of correlation is almost spooky, considering China’s ‘great firewall’ and supposed ban on crypto-trading.
Search interest in both China and the rest of the world dropped drastically from mid-May, even whilst the price was still rising.
Baidu search interest for ‘trade war’ showed a correlation with tweets from the Donald on May 5/6, but Bitcoin interest remained flat at this point.
Searches for ‘trade war’ and ‘Bitcoin’ did start moving in line on May 14, when Chinese media called for a “People’s War” against the USA. Both terms peaked on this date, before dropping off with rough correlation.
Though the timing of this came when the trade-war was already well underway, this alone just shows a potential link at this point. It does not directly indicate any lack of a link before this date. After all, as a non-technical indicator, Baidu trends is… also just okay.
For a fuller picture we could perhaps look at a chart of bitcoin trade volume in Chinese Yuan?
Although even that does not show the full picture, as many Chinese investors prefer to bypass direct CNY trading. Thanks to government monitoring, they often exchange it for stablecoins like Tether first, even paying a premium for the privilege.
Are the Chinese driving Bitcoin price to new yearly highs? Share your thoughts below!
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