Global Google search traffic for the term “cryptocurrency” is at lowest A point in five years that reflects a shift in user sentiment. While prices of top crypto assets, including bitcoin, are well above 2018 lows at spot rates, market participants appear concerned about falling interest rates.
Interest in Bitcoin, Ethereum and Cryptocurrencies Falls
Typically, cryptocurrency users closely monitor sentiment indicators, including Google Trends data, to gauge overall interest. Analyzing search data can provide valuable insights into how broader audiences perceive and interact with digital properties. As is currently the case, rapid changes in search trends can herald changes in sentiment, which often directly affect supply and demand market forces.
Amid this development, searches for “bitcoin,” the world’s largest currency by market capitalization, have remained visibly stable above levels seen in 2019 and 2020, likely due to its established reputation and recognition. Conversely, searches for “Ethereum,” while still above 2019 levels, are declining, reaching a near three-year low in August 2023. Interestingly, Ethereum is the second largest cryptocurrency by market capitalization in the world and a pioneer of smart contracts, dominating the decentralized finance (DeFi) and non-fungible token (NFT) scenes.
Blame Crypto Winter and Maturing Markets?
The decline in search traffic occurred during the last bull market cycle, with most search traffic being driven by individuals looking for deals and speculative opportunities, often motivated by greed. Judging from Google Trends data, searches for “cryptocurrency” surged in 2020 and peaked at the end of 2021.
Subsequently, the price of major assets including Bitcoin rose from less than $8,000 to $69,000 by the end of November. As cryptocurrency prices began to cool in late 2021, so did searches, reaching their lowest level in nearly five years as of early September.
Contractions can also arise from factors other than price volatility. For example, the industry has matured over the years as users take advantage of real use cases emerging in encryption solutions. Infrastructure is developed and policy makers enact appropriate laws.
With regulators stepping in and policy makers enacting clear laws, industry players are increasingly prioritizing the development of suitable decentralized applications (dapps) that lay a solid foundation to foster utility while maintaining compliance and adoption. This shift may indicate a community commitment to growing the industry responsibly.
In recent months, the U.S. Securities and Exchange Commission (SEC) has been cracking down on rogue entities with enforcement actions, severely penalizing protocols and founders who break the rules. Exchanges including Binance and Coinbase have also been sued.
On a more positive note, analysts expect regulators may approve the first spot bitcoin exchange-traded fund (ETF) in the coming months. If this is the case, organic searches for bitcoin (and possibly cryptocurrencies) could rise, potentially supporting prices.
Featured image via Canva, chart via TradingView