Last week (August 28th 2019) saw Bitcoin ($BTC) fall below $10,000 USD for the first time since July 2019.
While Bitcoin’s price dip can likely be attributed to several factors, one explanation has gained traction given the timing: Burning Man.
Jeff Dorman, chief investment officer at Arca, has been quoted on several news outlets as saying:
“It’s the week before Labor Day. Half of crypto is at Burning Man and the other half is sitting on their hands doing nothing.”
Fundstrat co-founder, Tom Lee, echoed the sentiment on Fox Business:
“In a week like this, when there’s Burning Man happening and Labor Day, there aren’t a lot of inflows into bitcoin”.
So, what is Burning Man?
Burning Man is a yearly festival held in the Black Rock Desert of Nevada, known for its mix of hedonism, attendees from silicon valley, rich ‘self-expression’ and gift-giving economy (festival goers are encouraged to barter and engage in alternative forms of exchange as traditional monetary exchange isn’t allowed).
With its rejection of traditional financial systems, it’s easy to see why it appeals to crypto enthusiasts. The similarities have inspired both articles and books, including: From Bitcoin to Burning Man and Beyond: The Quest for Identity and Autonomy in a Digital Society.
In recent years camps have appeared at the festival – such as Camp Decentral, CampDAO and Node Republic – providing a community for said enthusiasts to congregate, as well as offering crypto talks and seminars to attendees during the festival.
Burning Man even briefly accepted Bitcoin donations. An idea was also floated for a “burner token” for the festival, though it was quickly shelved as it was considered to run counter to the gift-giving nature and ‘Decommodification Principle’ embraced by the festival.
Did Burning Man cause Bitcoin’s price to fall?
While it’s an interesting idea that a vast swathe of crypto traders took time out from trading to frolic in the Nevada desert – and in turn caused Bitcoin’s price to fall – the data just doesn’t agree.
2013 AUG 26TH – SEPT 2ND
2014 AUG 25TH – SEPT 1ST
2015 AUG 30TH – SEPT 7TH
2016 AUG 28TH – SEPT 5TH
2017 AUG 27TH – SEPT 4TH
2018 AUG 26TH – SEPT 3RD
Burning Man likely has little to no impact on the price of Bitcoin, with the historical data revealing no recurring patterns, suggesting little to no correlation with the event as prices have both risen and fallen in previous years during the time the festival has taken place.
Meaning if you’re both a ‘burner’ and a crypto trader you can rest easy (or party hard) knowing that attending Burning Man, in all likelihood, won’t affect the famously volatile cryptocurrency.