Bitcoin’s (BTC-USD) Google search terms have gathered steam again. According to Google Trends, both the terms “Bitcoin” and “BTC” have thirty-day search ratings of 58.00, which is a solid increase from the 31.00 that the algorithm exhibited a month ago. I did a scatterplot a short while ago that suggested BTC-USD’s daily returns correlate with the number of search terms. The regression analysis I did on the plot’s output indicated that it’s 67.22% likely for BTC-USD’s price to appreciate alongside an increase in Google searches.
I have good reason to believe that this correlation will hold and, more importantly, that investors’ interest will endure.
First of all, Bitcoin has a history of being a go-to asset for investors during uncertain monetary environments. Global inflation rates are running hot, and the World Bank has revised its global GDP forecast down by 0.9%, suggesting that a financial disaster could be in the cards. These underwhelming economic factors could lead to severe erosion of cash and bonds, requiring alternative stores of wealth.
The second reason I’m pretty confident that BTC will produce solid medium-term returns is simply because of market forces. Bitcoin’s investor base loves buying into dips, and I’m anxiously awaiting the next glory buying spree. The asset is down by more than 10% for the year and is trading above its 10-day moving average, prompting me to believe that an early-stage momentum trend has formed.
Bitcoin is very much investable at this stage, but investors need to be cautious as this is an asset with ever-changing influencing variables, which explains its abrupt price movements. I’m bullish for the medium term as I believe many investors could buy bitcoin as a “bet against humanity” during these uncertain times. Additionally, a BTC-USD price recovery is long overdue, and I wouldn’t want to miss out on its next bull run!
On the date of publication, Steve Booyens held a long position in BTC-USD. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
