Is Bitcoin officially back? As of today, it certainly seems so after Bitcoin managed to avoid a sell-off below $9,000.
Crypto’s top coin even survived the Libra unveiling yesterday, when Facebook announced its new cryptocurrency. Unlike Bitcoin, the Libra will serve as a “stablecoin”, meaning its value won’t fluctuate like other non-stable cryptos.
Facebook leadership hopes that the Libra will become the most popular way to send and receive cash among friends. Boasting instant, zero-fee transactions, Zuckerberg’s highly anticipated project could change the way we view cryptocurrencies forever.
Better yet for crypto speculators, it won’t threaten Bitcoin. Instead, it should only help drive its value higher as a complementary cryptocurrency, cementing Bitcoin’s status as “digital gold” opposite the Libra, which would mostly be used for quick transactions.
And based on some suspicious price activity as reported by eagle-eyed Twitter users, some analysts now think institutions are starting to realize Bitcoin’s long-term potential as well.
The image above, which was captured by @BullOfCrypto on Twitter, displays how often Bitcoin was searched on Google over the last 12 months. His initial gut reaction was that this relatively “flat” trend does not accurately reflect Bitcoin’s 2019 resurgence.
He argues that because Google search trends are down, retail investors aren’t the ones “pumping up” Bitcoin.
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“This is not retail money moving the price,” @BullOfCrypto boldly claimed.
As a digital currency nerd myself, I’d love it if that was true. It’s the watershed moment crypto investors the world over have been waiting for – mass participation from Wall Street and the big banks.
If institutions got serious about crypto (they will eventually have to), then Bitcoin would certainly blow past its all-time-high from late 2017.
The digital currency media covered this story too, posting @BullOfCrypto’s findings across several websites.
Crypto investors got excited as the newly discovered divergent trend made the rounds.
But before I got swept up in the wave of institutional Bitcoin optimism, I wanted to be absolutely sure that what everyone was talking about held any water.
So, I plotted Bitcoin’s price movement (over the same time period) on an updated version of the Google search trends chart, and adjusted its scale to fit:
Do those two lines look similar to you? They certainly appear correlated to me.
At the very least, I think everyone could agree that chart doesn’t show trend divergence in any way.
More importantly, does the graph indicate that Bitcoin’s surge in 2019 is not a biproduct of renewed interest from retail investors?
Not in the slightest.
So, even though crypto investors have gotten excited about the recent “fairy tale” cooked up by a hopeful bull, the truth is that the Google search trends are in no way, shape, or form indicative of institutional participation.
It’s certainly coming down the road, and you can be sure that we’ll see signs as Wall Street starts to pile into digital currencies.
This, however, is not one of them.
And while many crypto enthusiasts would find this revelation disappointing, I would argue that it’s nothing to get upset about. Up until now, retail investors have been crypto’s (and Bitcoin’s) main drivers of success.
For better or for worse, institutions are waiting for us “common folk” to regain confidence in crypto before jumping in with both feet.
If institutions were truly behind the current pump, then the correct reaction would be disappointment, not optimism. You’d hope that investment banks could push Bitcoin past a measly $9,000, when less than two years ago it almost touched $20,000.
Now don’t get me wrong – a currency reckoning is in our future, I’m sure of it. But it’s not going to happen out of the blue. Adoption of new currencies like Facebook’s Libra will end up prodding the world in that direction, not hopeful analysts grasping at straws.
And until that happens, we’ll continue to watch and wait.