Hello everyone
This is a quick summary of a very interesting article I read this morning, by Xoel López Barata. I am outlining the main conclusions in plain English here as the article can be a bit technical and challenging if you are not well versed in statistics. The full details of the article are shown at the bottom of this short story.
Predicting future price
Although past performance doesn’t indicate future performance, the author of this article has used a sound method called Monte Carlo simulation to predict the future price of bitcoin using past pattern of price variation. In short, if it was observed in the last 12 months that the maximum price increase in a day for bitcoin was +21% and the maximum price decrease in a day was -19%, this price variation range will be used to estimate how bitcoin is likely to vary from one day to the other.
Results
As shown on the above graph, the end of year price for btc is ranging between $1,000 and $1,000,000. More precisly, you can observe on this graph that most scenarios lead to a btc price between $10,000 and $100,000 by the end of 2018.
Final prediction
To make it easier to read, the article's author plotted the distribution of the end of year price on a 'bell' graph which shows the probability of each price to be reached by the end of the year.
Looking at the above graph, it now appears that the most likely price for bitcoin by end of 2018 is about $55,000.
References
If you like this article and would like to invest in bitcoin in a safe manner, I would recommend using eToro using the following link: https://goo.gl/ti4F6R.
eToro - the safest way to trade bitcoin, cryptocurrencies and other traditional assets: https://steemit.com/bitcoin/@mattyoz/etoro-the-safest-way-to-trade-bitcoin-cryptocurrencies-and-other-traditional-assets
I’ve simulated the bitcoin price for the whole 2018. You won’t believe the result!: https://medium.com/@xoelop/weve-simulated-the-bitcoin-price-for-the-whole-2018-you-won-t-believe-the-result-4a602679dac2