One of the tropics that observers often cite to explain the forces behind the rise of cryptocurrency markets in late 2020 and early 2021 is that the process was largely driven by the theft of institutional investments.
While there are many good reasons to believe that the race between major players in traditional finance to access digital assets has already provided a lot of fodder for the explosion, close attention to this story may give the impression that there is little that retail investors can do. play.
Taking the public’s attention away from the public can be a mistake, because blockchain is essentially a social technology. Bitcoin (BTC) as an investment vehicle could hardly exist without the crowded Main Street market and social media arena where market narratives emerge and collide.
The rise in social interaction with cryptocurrencies has been a harbinger of the recent rally and its immediate consequences. Is there a way to gauge the recent growth in user influx into the crypto industry?
Higher prices = increased interest
Perhaps the simplest trend is an increase in search activity, coinciding with the rapid growth of cryptocurrencies. The applicable calculation is the volume of Google searches for cryptocurrency-related terms. In the week of January 3, the Google Trends Global Interest Index for the term bitcoin reached 68, more than two-thirds of the all-time high set in the week of December 17. From the previous record bull run in 2017-2018.
Ironically, searching for the meaning of basic code phrases amidst the internet hype following a major price adjustment could indicate a potential first impulse for a beginner to learn about the topic. While this is a necessary first step for more realistic interactions with digital assets, research data shows only a fraction of how deep the interaction is. A sudden spike in research could also be a sign of FOMO-driven behavior that doesn’t result in more significant activity when the hype dies.
The volume of traffic to specialized cryptocurrency analysis sites may be a slightly more accurate indication of a new wave of curiosity about cryptocurrencies ready to read beyond the headlines. CoinGecko, one of the largest cryptocurrency aggregators, has shared some of its internal analysis to give an idea of the degree of engagement they have gained in light of recent market fluctuations. Co-founder and CEO Bobby Ong commented to Cointelegraph:
“Over the last 30 days [Dec 13 to Jan 13] we have seen our bitcoin page grow 77% over the previous period. Ethereum page views also increased by 90% over this period. In general, our traffic increased by 43%. % during this period. ”
However, it is impossible to know what percentage of this income comes from newbies versus returning crypto investors.
If we accept that a Twitter discussion of cryptocurrency is more likely to reveal meaningful interactions with the digital asset space than just exploring what Bitcoin is, there is good news in the latest data.
While the public interest metrics measured by Google Trends after the recent rally failed to surpass the highs in late 2017, many of the accounts associated with Twitter conversations have reached high levels. Trace Dahlem, an analyst at The Tie, a digital asset data provider, explained to Cointelegraph:
“While organizations may have started this cryptocurrency rally, retail has definitely arrived. The average number of daily Twitter users talking about Bitcoin hit a new permanent high of 35,883 and hit the previous high of 35,181 in January 2018. This is huge as it shows that retail investors here are happy with Bitcoin. ”
Dahlem added that the share of bitcoin tweets coming from unique Twitter accounts also hit a record 53.3%, indicating that the increase in conversation is driven by new users, not just intense discussions between existing Crypto contributors. Twitter.
A bigger challenge is assessing the level of awareness and adoption of cryptocurrencies that preceded the recent price spike. This understanding could support the argument that the increased participation of retail investors can not only be due to the growth of the cryptocurrency market, but at least in part.
The data types that are best suited to answer general population questions about the percentage of people who know and use digital assets can be obtained through surveys. While there are many surveys related to cryptocurrencies, few want to achieve any level of performance and use the same method less systematically.