Can Bitcoins’ prices be predicted by google trends data? An example of Turkey with comparision of USA

Bitcoin is a very popular crypto currency primarily due to its ease of use, ability to remove intermediaries and also for many other reasons. Merchants, investors and academics are interested in bitcoin in various respects. But there aren’t so many researches about the investigation of bitcoin prices in the literature. In this study, we aimed at finding if “bitcoin” searches on Google in Turkey and USA can help to predict current bitcoin price or not. Besides that, we desired to examine the effects of prior bitcoin prices on current bitcoin prices. We run weekly historical data of bitcoin prices and also weekly data of “bitcoin” queries on Google which are searched for in Turkey and in USA separately between 2011-2016 years. We benefited from eviews program for our analysis. ARIMA method is used for model selection and least squares methods are used for evaluating the overall significance or separated significance of every variable. Our findings imply that when USA Google “bitcoin” searches increase, bitcoin prices drops. However, when Turkey Google “bitcoin” searches drop or increase bitcoin prices don’t affected by these movements.