It’s no secret that bitcoin’s exchange rate has been inflated due to media attention, leading many to believe that there’s been a speculative bubble. While it’s impossible to tell what the true rate of a bitcoin should be, there is evidence that the increased attention has now subsided, yet bitcoin’s exchange rate continues to increase.
Google trends uses an index to determine relative search volume for a specific term, with 100 being the peak. From early March until mid-April, we saw a nearly 10x increase in search volume. By the end of may, this large increase has nearly subsided to March levels.
Wikipedia
Considering how early-stage bitcoin is, a significant amount of people were researching it on wikipedia after hearing about it from from news sources or friends. With 1,343,684 views in April, bitcoin was the 24th most visited page on wikipedia for the month of April. There is a massive spike visible around April 15th that matches well with the spike seen in google trends. Similarly, current page view volume is about the same as early March levels.
Twitter saw a very similar trend over the last 90 days for tweets using the hash tag #bitcoin, however there was not as significant of a drop-off as on wikipedia and google. Part of this could be explained by people having developed a fundamental understanding of the currency, and are now looking for up to date news and discussions around the topic.
Exchange Rate
Finally, we have a graph of the same 90 day data for the exchange rate of BTC/USD on Mt. Gox. It is clear that the peak in prices in mid-April had a direct correlation with both google and wikipedia interest. The USD/BTC rate continues to move upward with a clearly defined floor – marked in red. Interestingly, the exchange-rate peak occurred several days before the peak in search and social media. This indicates those trends are actually lagging indicators and won’t be especially helpful in identifying if another bubble is about to occur.
It is quite possible that had there not been so much media attention on bitcoin, it would have continued along its current trend line without the large spike over $200. The bubble from mid March to early May too clearly matches the increase in attention indicated by Google, Wikipedia, and Twitter.
I’m curious, how has your traffic been affected? I assume it is similar to Twitter’s but has a more profound uptick since the media hype.