Retail is here: The virtuous cycle of social engagement with crypto

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One of the tropes that observers commonly invoke to explain the forces behind the crypto markets’ surge at the end of 2020 and in early 2021 is that the process has been mainly driven by the inrush of institutional investment. 

While there are many good reasons to believe that the race among the big players of traditional finance to get into digital assets has indeed provided much fodder for the blast, the overwhelming focus on this narrative can make it seem that retail investors had a little role to play.

Shifting the spotlight away from the public can be misguided because blockchain is fundamentally a social technology. Bitcoin (BTC) as an investment vehicle would struggle to exist without the bustling Main Street marketplace and a social media arena where market-driving narratives emerge and clash.

Heightened social engagement with crypto has been both a precursor for the recent rally and its direct consequence. Is there a way to quantify the crypto industry’s recent gains in terms of user inflow?

Surging prices = Surging interest

Perhaps the easiest trend to capture is the surge in search activity coinciding with rapid gains in crypto prices. One established metric is the volume of Google searches of cryptocurrency-related terms. In the week of Jan. 3, Google Trends’ global interest over time index for the term “Bitcoin” reached the value of 68, which amounts to more than two-thirds of the all-time high registered in the week of Dec. 17, at the height of the previous record-breaking…

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