Dr. Aaron Yelowitz, an associate Professor and Director of Graduate Studies in the Department of Economics at the University of Kentucky together with Matthew Wilson have published a paper analyzing Bitcoin and its US users via Google Trends.
The title of the paper is “Characteristics of Bitcoin Users: An Analysis of Google Search Data”. The researchers compiled Google Trends search query data from January 2011 to July 2013 for all US states, looking for terms related to bitcoin and its possible clientele, for instance, “Bitcoin”, “Bitcoins”, “Bitcoin Mining”, “Bit Coin”, “Bitcoin exchange”, “Bitcoin price” and “Bitcoin value”.
Based on the data, the researchers formulated four possible categories of users for bitcoin: speculative investors, libertarians, programming enthusiasts and cybercriminals.
The researchers referenced previous research leading to the conclusion that the three main motives driving bitcoiners were profit, political ideology and curiosity. Yelowitz and Wilson stated that some of the correlations were difficult to measure considering the sensitivity of bitcoin activity.
Computer programming and illegal activity were positively associated with bitcoin use, but there was no association for libertarian ideology and investment motives.
“Given the paucity of data on bitcoin, I view our study as a first step – but certainly not last step – into understanding this market.” said Yelowitz.
Regarding regional distribution, the data displayed that most bitcoin users were grouped in the states of California, Utah, Oregon, Washington, Nevada, New Hampshire and Vermont.
The data showed correlations between diverse searches, so users with an interest in computer science or for example Silk Road were associated with interest in bitcoin. Yelowitz and Wilson also included a ‘placebo clientele’ in the form of users searching for the singer Miley Cyrus, with no effect on the results.
They also observed the effect of price swings on search volumes.
“Profit-motivated clientele – such as speculative investors – may find bitcoin more intriguing when prices are high. However, we again observe a positive association between bitcoin interest and our two clientele groups of computer programming enthusiasts and those possibly engaged in illegal activity.” – said Dr. Aaron Yelowitz.
Moreover, it turned out that political and investment motives were less significant than expected.
“We find robust evidence that computer programming enthusiasts and illegal activity drive interest in bitcoin, and find limited or no support for political and investment motives.”
The researchers stated that “fluctuations in computer science and illegal activity” continue to drive bitcoin interest, along with the traditional business cycle, which means that higher unemployment rates are negatively associated with interest in bitcoin. They also found some evidence that libertarian activity drives interest in bitcoin, but the association appears to be limited.