Recently, our signal that tracks interest in bitcoin on social and collaborative media has risen ahead of strong upward momentum in the price of the cryptocurrency. Similarly, the price has tended to follow the monitor signal down. It seems online interest is correlated with bitcoin's price — which is unsurprising, given most are unfamiliar with cryptocurrency and would research it online before buying.
When bitcoin was trading around $4,000, interest in it was research-based, generated by internet users seeking to understand the technical aspects of the cryptocurrency. Engagement with pages and accounts on subjects such as blockchain databases and the hyperledger were the main drivers of our Bitcoin Interest Monitor.
By contrast, the recent uptick in bitcoin interest has not been driven by in-depth research. The signal's main drivers have reflected what appears to be superficial and potentially speculative interest in bitcoin. This analysis suggests that whereas past surges in the price were driven by well-informed purchasers, this latest spike was driven more by the herd behavior of less serious investors. The foundation of this price bump may be weaker than previous ones.
Ethereum, another popular digital coin, has gained only modestly since the end of July 2017 and not matched bitcoin's boom. But, based on the nature of online interest, recent gains in ethereum may be more stable. The main drivers of interest in ethereum have remained constant and esoteric — concepts such as proof-of-stake, proof-of-work, smart contracts, and shard. That attention to the fundamental protocols and applications of the ethereum blockchain is driving online interest in the cryptocurrency suggests a more-informed investor base than that for bitcoin.
According to our signals, Jerome Powell and John B. Taylor are still netting the most interest among online audiences. Attention to Kevin Warsh has dramatically tanked, even though a White House source told Politico that should the notoriously mercurial president change his mind between now and Thursday, Warsh would be the most likely candidate.
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