Loading...

Research Shows Google Search Trends Can Forecast Bitcoin Price Increases


Forecasting Bitcoin Price
Scientific research is mounting that certain indicators (variables) can be useful in determining (forecasting) the future price of Bitcoin and sometimes related volumes in trading activity. This study from 2019 by Nasir, Huynh, Duong, and Nguyen analyzes the price relationship between Google Search Trends activity and the price of Bitcoin. Google trends is an open source data resource that tracks the frequency of particular search terms. The authors of this study hypothesized that sentiment indicators, like Google Search Trends, could be relevant to the future direction of Bitcoin; and used a scientific approach and statistics to reach their conclusion.

Researcher Findings
  • Google search values exert significant influence on Bitcoin returns, especially over the short run
  • Relationship between Google search values and Bitcoin price/volumes does not persist over the long run (it is a short lived effect)
  • Bitcoin price responded positively to upward shocks of the Google search value
  • Increases in trading volumes were observed for at least a week following the shock event

  • The below is the Google search trend result for "cryptocurrency" over the last 5 years as of the time this article was published. Given that the original research was done in 2019, implications from this research will likely needs to be re-assessed given that these relationships can change over time (as the authors also point out). More recently in 2022, the two spikes in the search term value of Bitcoin coincided with severe price declines in May & June.



    Nasir, M.A., Huynh, T.L.D., Nguyen, S.P. et al. Forecasting cryptocurrency returns and volume using search engines. Financ Innov 5, 2 (2019). https://doi.org/10.1186/s40854-018-0119-8




    Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Author does not own the any crypto currency discussed. The information and content are subject to change without notice. CryptoDataDownload and its affiliates do not provide investment, tax, legal or accounting advice.

    This material has been prepared for informational purposes only and is the opinion of the author, and is not intended to provide, and should not be relied on for, investment, tax, legal, accounting advice. You should consult your own investment, tax, legal and accounting advisors before engaging in any transaction. All content published by CryptoDataDownload is not an endorsement whatsoever. CryptoDataDownload was not compensated to submit this article. Please also visit our Privacy policy; disclaimer; and terms and conditions page for further information.

    THE PERFORMANCE OF TRADING SYSTEMS IS BASED ON THE USE OF COMPUTERIZED SYSTEM LOGIC. IT IS HYPOTHETICAL. PLEASE NOTE THE FOLLOWING DISCLAIMER. CFTC RULE 4.41: HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. U.S. GOVERNMENT REQUIRED DISCLAIMER: COMMODITY FUTURES TRADING COMMISSION. FUTURES AND OPTIONS TRADING HAS LARGE POTENTIAL REWARDS, BUT ALSO LARGE POTENTIAL RISK. YOU MUST BE AWARE OF THE RISKS AND BE WILLING TO ACCEPT THEM IN ORDER TO INVEST IN THE FUTURES AND OPTIONS MARKETS. DON’T TRADE WITH MONEY YOU CAN’T AFFORD TO LOSE. THIS IS NEITHER A SOLICITATION NOR AN OFFER TO BUY/SELL FUTURES OR OPTIONS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED ON THIS WEBSITE. THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR METHODOLOGY IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

    Latest Posts
    Follow Us
    Notify me of new content