Can the value of Bitcoin be predicted by looking at the number of domain names registrations containing the term “Bitcoin”?
In its blog post entitled “Domain Registrations: Is Bitcoin Going Mainstream” Verisign says:
“Earlier this year we used Bitcoin as an example of how domain registrations could be an effective gauge of interest in a particular subject. Our analysis demonstrated a clear rise in the number of registered .com and .net domain names containing the term “Bitcoin” in 2013, as well as a positive correlation between increased registration activity and increases in the dollar value of bitcoin.
In this post, we decided to take a look at the history of Bitcoin-related domain registration activity since 2009 to see if we noticed any other trends.
The Bitcoin phenomenon essentially began on Oct 31, 2008 with the publication of the now well-known “Bitcoin White Paper.”
In the next year, only four domain names containing the term “Bitcoin” were registered, and only 295 domains containing ‘Bitcoin’ were registered in the following year, 2010.
This seems consistent with the history of Bitcoin, since in its early years it was just an interesting cryptographic project and each coin had little actual value. For a price reference consider this: in May 2010, two pizzas were purchased for 10,000 bitcoins.
However, in 2011, the first major bitcoin boom and bust occurred.
As illustrated in the graph below, domain registrations increased when the price jumped up and slowed down soon after the price fell.
There were 4,572 registration in 2011, and only 1,734 registrations in 2012. This seems to be the first time the correlation between bitcoin price and Bitcoin domain name registration is clearly visible.
Source: Verisign Data.
Then, as previously discussed, in 2013, we noticed that spikes in registration activity among .com and .net domain names containing the word “Bitcoin” seemed to correlate with spikes in bitcoin’s dollar value, with 23,226 registrations.
Bitcoin’s value has been relatively quiet in 2014; however, unlike the 2011/2012 cycle there has still been considerable Bitcoin domain name registration activity – 15,232 registrations through August 18 – and a number of high value domain name sales in the space led by BTC.com which sold for $1 million.
Could this be an indication that Bitcoin is here to stay?
