Is the Market Overheated Yet? Traffic Comparison Between 2017 and Now
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Is the Market Overheated Yet? Traffic Comparison Between 2017 and Now

2 years ago

The crypto markets are seeing a huge spike in prices, unseen since 2017. But how do the two rallies compare?

Is the Market Overheated Yet? Traffic Comparison Between 2017 and Now

The bull-run in 2017 saw a significant amount of retail interest — everyone was discussing the price of Bitcoin, ICOs, blockchain technologies disrupting markets. After three (long) years, the current rally might just see Bitcoin’s price trade back to or even surpass the all-time-high set in December 2017, but is “retail interest” in cryptocurrencies back to that level yet?  

In the following charts we compare CoinMarketCap’s proprietary traffic data, Google Trends data and the prices of the two largest cryptoassets, Bitcoin and Ethereum.

The chart above shows that while the price of Bitcoin is approaching the all-time-high set in December 2017, web traffic and retail interest (as seen in CoinMarketCap’s Bitcoin page traffic and Google Trends data for “Bitcoin”) have not been nearly as high as during the bull run in late 2017.  

CoinMarketCap’s BTC page traffic and Google Trends data have been similarly correlated during other significant rallies and dips, e.g., summer 2019 when Bitcoin surged passed $10,000, March 2020 when Bitcoin sold-off with global equities on Covid-19 fears, and May 2020 when Bitcoin recovered and rallied pass the $10,000-mark again. This might mean that the current interest in cryptocurrencies is mostly from cryptocurrency enthusiasts, and less from “non-crypto-native” people. If that is the case, the recent strength in the rally would probably be due to money flowing in from institutional investors, where investment per capita would be significantly greater than that from retail investors.

As more institutional investments flow into the cryptocurrency space, retail interest should start to pick up as prices continues to push towards the all-time-highs. This may place Bitcoin firmly in the spotlight and could potentially push the prices even higher as a surge of retail investors enter the space, akin to the run up in 2017.

While Ethereum’s price is not half nearly as its all-time-high in January 2018, its web traffic is also picking up nicely, similar to the web traffic levels of Bitcoin when compared against the 2017/18 levels.  

That said, the chart shows that the current web traffic is trailing behind the levels during summer 2019 or the DeFi wave in summer 2020. As Ethereum is not as widely recognized as Bitcoin, it is also probably that its traffic is attributed to investors who are relatively crypto-native. However, we fully expect traffic to pick up as prices continue to trend towards the highs.  

From the data surveyed, we can conclude that retail interest in the cryptocurrency space, especially in Bitcoin and Ethereum, has not reached the feverish levels seen in December 2017. This might be an opportune time, before the retail interest picks up, to talk about Bitcoin and cryptocurrencies to your friends and family, especially during the holiday season! Here are some points that you could use to educate them regarding risks and drawdown of Bitcoin.  
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