By CCN.com: China may have cracked down on cryptocurrency companies, but that’s not stopping the local population from pursuing bitcoin as an investment. Economist and trader Alex Kruger did the research and found that there may be some truth to the theory that China fueled much of the gains in the BTC price last month. June hasn’t been so kind, at least so far, with the bitcoin price down more than 7% in the last 24 hours. In May, however, bitcoin was a rock star as its value expanded by a whopping 60%.
In a series of tweets, Kruger explained how he scoured search trends on China’s Google – Baidu – looking for answers and connecting the dots. As it turns out,
“China’s bitcoin popularity has definitively been on the rise.”
The parallels between the bullish BTC price and Baidu search trends are likely not a coincidence. Chinese investors have reportedly been looking to offset fears of a crumbling yuan as a result of the U.S./China trade war by converting the local currency into USD or bitcoin. In fact, the value of the yuan shed 2% vs. USD on the heels of President Trump’s aggressive tariffs, according to Forbes. Primitive Ventures Dovey Wan observed the trend early on:
Kruger backed up his Baidu/bitcoin search suspicions further, pointing out that the rise in the number of Baidu bitcoin searches coincided with the cryptocurrency’s performance even in April. By May, the trend became clear as at critical points, such as when the BTC price reached $6,000 or when it muscled its way from $6,400 to $7,450 and eventually made a new 2019 peak at $8,350 amid a wave of FOMO. Kruger stated:
“Interest in bitcoin spiked either after price breakouts or during breakouts.”
He provided the following illustration:
China and Baidu shared a similar behavior with Google Trends. Kruger stated:
“Both interest in bitcoin in China (as measured by Baidu Trends) and in the World (as measured by Google Trends) increased similarly and on the same dates (note: dates adjusted by time zone).”
Kruger noted a “bearish divergence,” however, that took place starting in about mid-May.
At that time, bitcoin’s value continued to increase but searches on Baidu and Google weakened. Chinese interest in bitcoin is looking up once again, however, with Baidu searches back where they hovered at the key BTC $6,000 level. Meanwhile, “buy bitcoin” searches on Google Trends have fallen since May 31.
Last modified: June 14, 2020 11:17 AM UTC