Interest in bitcoin has never been higher since February 2018 during the very peak of prices.
According to Google search data, interest now is at 28 out of 100 in worldwide measures over the past five years.
Above we can see a lot of very interesting information, starting with the contrasting fact that ‘poor’ Africa and rich northern Europe are both at the top of regions interested in bitcoin.
A lot more interesting is that second peak in June 2019 when bitcoin searches stood at 26 out of 100.
That’s interesting because bitcoin’s price stood at about $14,000 in June 2019, suggesting price currently should be 50% higher as interest is higher than then.
Yet the price isn’t higher, and obviously that might change but it may be it isn’t because of inflation.
Bitcoin was running at 4% a year before a few days ago when it dropped to 1.8%, so giving us real world data about the effects of inflation and thus giving us some objective information in regards to what we should expect with fiat.
A second datapoint on that is from ethereum where inflation is running at just above 4% and is set to increase a bit further once a kind of testnet like Proof of Stake (PoS) blockchain goes out at best maybe during Devcon 2020 in around October.
Interest here has also grown a bit but no where near July last year when it reached 32, with it so being 50% lower worldwide.
In February 2018 in addition interest for eth was at nearly 50 out of 100, so indicating as it stands that we’re not quite seeing a two year cycle for eth as we maybe are seeing in bitcoin.
The difference may well be inflation as the supply chart kind of indicates below:
If we go back to the first drop in new supply in March 2017, they let it drop all the way to October 2017, seven months.
You can see above in the Google searches chart for ethereum interest starts to increase from March 2017, and then it peaks in June because obviously at some point speculative elements enter the equation.
What is interesting here then is why nearly nothing happened in January 2019 when again new supply was reduced, and the reason is perhaps because there was a vast amount of ‘new’ supply being introduced by ICOs.
Since January 2019, so a year and a half ago, not only was new supply not allowed to be reduced, but it was actually increased a bit by a few hundreds of eth a day at the opening of this year.
Increased. By a bit, but still, an increase is an increase and not a decrease which gives us this… well, depends on your view but terrible and/or beautiful chart.
We can see above the seven months long march of 2017, and then eth never recovers in value against bitcoin.
Obviously supply is not the only parameter in price equations and one can easily put this down to coincidence, but ‘coincidences’ in themselves can be interesting and informative especially when ordinary logics suggests there’s a probable reason to them.
Meaning a body of data is developing here that is telling a story about fiat, which is quite a bit more important day to day than these nice code games we playing.
The story being a bit more complex than a simple fiat value is falling because its supply is increasing and even uncontrollably, more complex in part because it is kind of offset by the increase in the value of assets.
But in a situation where both the value of fiat is decreasing and the value of labour assets is decreasing due to a huge rise in unemployment – supply – you may well get a very compounding factor which leads to many zeros behind fiat bills with labour so structurally falling in value very significantly even after some sort of normalization.
In short, it is maybe time to have some sort of debate and discussion over inflationary monetary policy and not in just ‘play toys’ but in the wholistic economic reality considering evidence is significantly growing regarding its harmful effects, both purely economically and also politically in allowing dictators or wanna be dictators to temporarily cover the economic effects of unmandated acts through what amounts to magic tricks without actually in any way even hindering the undeniable effect in the medium term and certainly not in the long term, with medium term here used more to suggest months not years, and short term so being weeks and at a stretch maybe a few months.