I share an idea to monitor for possible geopolitical or currency risk by using Google trends to track the change in interest in Bitcoin and other crypto currencies.
A comprehensive search would need to adjust for other factors such as news events, mining interest, speculation interest, etc. A quick review suggests possible increasing interest from Venezuela but it is not entirely clear and interest levels overall seem muted.
For traders, increasing interest might be a non-technical method to track whether or not cryptos are gaining more mainstream interest and adoption. In addition, one could track for related terms such as “coinbase”. Tracking ad costs for crypto terms and/or advertising spends by Coinbase might be illustrative too. Right now, there is not much evidence from overall interest levels to suggest sustained higher prices: to contrary, interest levels appear muted. Of course, a correlation analysis would need to be conducted to determine the value of this methodology. But, we seen steadily increasing interest during the bull market of 2017 whereas interest levels have been flat or declining for most of the bear market of 2018.
As for other alternative data sources, I felt that NVIDIA reporting expectation of less income from crypto segment could be viewed as overall bearish for the crypto currency market. I think that NVIDIA, AMD, and any other companies that have profits tied to mining may be good proxies to monitor for overall crypto health.
Curtis is passionate about markets. He has developed top ranked futures strategies. His core focus is (1) applying machine learning and developing systematic strategies, and (2) solving the toughest problems of discretionary trading by applying quantitative tools, machine learning, and performance discipline. You can contact him at firstname.lastname@example.org.
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