Admittedly, I know very little about Bitcoin, so please be kind if I am way off base. In September, SEMrush (a search engine marketing agency) demonstrated that the price of bitcoin had a 91% correlation with the volume of Google search requests for bitcoin-related terms. I first heard about Bitcoin several years ago through a Joe Rogan podcast episode. Recently, I’ve been inundated by social media posts about Bitcoin, the investment opportunity that I was missing, and Bitcoin’s seemingly inevitable bubble. I consider myself a pretty curious person, so how was I only learning about Bitcoin via social media? When the price of Bitcoin recently peaked at $11,000 USD, I was again reminded about the obvious correlation between the price of Bitcoin and how much Bitcoin news flooded my social media. I did my own research similar to SEMrush, and also noticed the strong correlation between Bitcoin price and Bitcoin “trending.” However, I also ran across something a little more concerning. (In the spirit of full disclosure, I own Bitcoin, Ethereum, and Litecoin.)

In the figure above, it is easy to see the price of Bitcoin and the Google Search Index for Bitcoin trending together. In fact a linear model revealed an 82% correlation between the price of Bitcoin and the Google Search Index.

But as we know, things are rarely truly linear. A sigmoidal model revealed that internet search volume explained 89% of the variability in Bitcoin price .

And, a Gaussian model revealed an 88% correlation, which frighteningly resembles a….bubble.

Which came first: the chicken or the egg? Whether or not these models tell us anything, it does raise the question about what is truly driving the price surge of Bitcoin. Many insist that mathematics is driving this, and I will admit, I have yet to understand this for myself. Mathematics may explain the future of Bitcoin, but, the recent craze does appear to be driven (at least somewhat) by viral social media posting. There are brilliant people involved with Bitcoin who can explain Bitcoin, and the mathematics behind it. I just can’t understand it yet 🙂