Understanding the Correlation Between Bitcoin’s Popularity and Market Trends
Cryptocurrencies have recently been emerging more and more as significant aspects of the global financial landscape, with Bitcoin leading the charge over the last 15 years. As a member of society in this changing world, it is imperative to analyze the dynamics between Bitcoin’s popularity, market trends, and the availability of information. In this report, there will be an exploration of the relationship between its price fluctuations, and information from the public Wikipedia page such as page views as well as revision history. This research aims to understand the importance of studying cryptocurrency trends.
Methodology
The proposed hypothesis suggests that Bitcoin’s Wikipedia pages activity between page views and revision history will correlate with its price fluctuations. The thought is that significant events in the financial world and market trends tend to trigger more revisions and an increase in public interest, which reflects in page views. To validate this hypothesis several measures were taken. First I looked into data directly from the Wikipedia page for analysis. Additionally, I obtained a graph from SoFi, an institution dedicated to providing financial information to its viewers, that shows the price changes for bitcoin from 2013 to 2023. I employed graphical analysis to visualize this data. Line graphs were generated to visualize Wikipedia’s page views, revision history and bitcoins price changes. On all three graphs the x-axis represents time, while the y-axis denotes respective variables. The analysis spans from 2011-present for revision history and 2016-present for page views. Additionally a price graph from 2013–2023 was obtained from SoFi.
Findings
The analysis of these graphs reveals some intriguing correlations between Bitcoin’s popularity and its market trends. The first is the presence of similar trends. The graphs of Bitcoin’s price(graph 3) and its Wikipedia’s page views(graph 2) exhibit strikingly similar peaks. This was particularly evident between 2 different time windows. The first was between 2017 and 2018 . Thinking back on this time, the first period is when there was the first major fluctuation and it broke into the tens of thousands which was major. It showed the validity of crypto currencies and gave people a sense that they might be here to stay. The second jump was between 2021 and 2022. This time was during Covid-19 when there was a so-called crypto boom. Most major cryptocurrencies flew up in price and bitcoin was a major player, going into the high 60 thousands. Surprisingly though, there appears to be more viewership on the wiki page during the first peak which was less than a third of the size of the second. Additionally, the revision history graph showcases many peaks and more edits before 2015, a period when bitcoin’s price experiences much slower and more gradual growth. Despite minimal price volatility, spikes in revisions indicate increased attention and possibly media coverage. This underscores the importance of considering non-price factors in analyzing cryptocurrency trends. My thought would have been that there would have been more substantial peaks in this history during the other two time periods mentioned. The absence of major price peaks during periods of heightened revision activity suggests a disparity between media attention and the actual price movements. This highlights the nuanced nature of cryptocurrency markets, influenced by various external factors beyond mere popularity.
Implications
Understanding the correlation between Bitcoin’s popularity, market trends, and information availability holds several implications. One is the thought of how this information can be used for market analysis purposes. Incorporation non-price metrics like Wikipedia page views and revision history could enhance these analytics by providing deeper insights into investor sentiment and public perception. There is also the idea of how this may be used for something like predictive modeling. Identifying patterns between information trends and price fluctuations lays the groundwork for developing predictive models which can be used to forecast crypto currency movements more accurately. It is important to note that many of these revisions tend to occur after something big has happened but not necessarily always. Thinking about predictive modeling and analysis could lead to profit, but could also help to manage risks. By monitoring changes in Bitcoin’s popularity alongside market trends, investors and stakeholders can better assess and manage risks associated with cryptocurrency investments. This is important for a market that is so extremely volatile as it is still in its infancy. This market is very dangerous to dip your toes in as it has a high risk of the market plummeting, but also a high reward of it skyrocketing.
Conclusion
The analysis underscores the intricate relationship between Bitcoin’s market dynamics, its popularity, and the availability of information to the public. While Wikipedia page views and revision history certainly exhibit correlations with price changes, the nuances of crypto markets require more comprehensive analysis beyond mere popularity metrics. Moving forward, the potential for integrating non-price data into market analysis frameworks has the potential to enhance our understanding and prediction of cryptocurrency trends, facilitating informed decision making in this rapidly evolving and volatile market. As information scientists, recognizing the significance of studying cryptocurrency trends can equip us with invaluable insights into the intersection of technology, finance, business, and information. This can contribute to more informed decision making for investments in the digital era.
Works cited
Nibley, B. (2023, March 1). Bitcoin Price History: 2009–2023. SoFi. https://www.sofi.com/learn/content/bitcoin-price-history/
