Every four years, the entire world gathers around sports bars and personal TV sets to watch the most highly-anticipated event ever: the FIFA World Cup. Known as soccer’s (or football everywhere else) crown jewel, the tournament is unique in that it attracts even those who are completely uninterested in sports.
Indeed, while the U.S. National Team failed to qualify for this year’s World Cup held in Russia, the event is still drawing considerable American fans. True, they don’t have a strong rooting interest, but this is one of the rare opportunities to see the beautiful game’s stars shine, irrespective of their national origin.
And let’s be honest with ourselves – even those who are “too cool for school” to watch sports still watch the World Cup!
But given the tremendous interest towards this single event, it makes me wonder: does the World Cup impose a distraction to bitcoin and other cryptocurrencies? On surface level, the notion admittedly sounds ridiculous. Those who are ardent bitcoin supporters typically eschew mainstream passions, especially hyped-up sporting events.
However, bitcoin truly went bonkers last year. Not only that, alternative cryptocurrencies, or altcoins, gained substantial international prominence. What this amounts to is that cryptocurrencies are no longer the exclusive niche of computer geeks. Today, news sources such as CNBC and Bloomberg routinely cover bitcoin when once they mocked it.
So the possibility at least exists that a great many investors would tune out of bitcoin and cryptocurrencies once the World Cup kicked off. Interestingly, on June 14th, the tournament’s opening game, bitcoin volume hit $5.14 billion in value. But since then, volume levels have slipped.
Yesterday, on June 21st, volume dropped to $3.53 billion in value, one of the lowest value points seen so far this month.
Furthermore, we saw a similar decline in volume during the last World Cup. On the kick-off day of June 12th, 2014, bitcoin volume was worth $50.8 billion. By the end of the tournament, volume slipped to $11.3 billion.
Are people really getting distracted with a sporting event? Maybe, but the evidence is not conclusive. Although the possibility is compelling, we simply don’t have enough data. The World Cup is a quadrennial event, and cryptocurrencies have only been around for about a decade.
Plus, the last World Cup coincided with a sharp decline in the bitcoin price. Cryptocurrencies continued to fall well after the tournament, suggesting that the ultimate cause was something other than a distraction.
Still, I wouldn’t completely discount the idea that a mainstream event could distract those vested in cryptocurrencies and altcoins. As bitcoin becomes more popular, it will simply incur more risks.