My Simple Mathematical Attempt At Predicting Future Bitcoin Value

Let’s be clear about this. At this point in human history, I DO NOT believe that there is a proven / credible method / reasoning / valuation / technical approach or whatever approach you may think of, in predicting what is the future value of Bitcoin (BTC). Based on prevailing sentiments / comments, the range of speculated future value of BTC appears to be really HUGE!!!!

Winklevoss twins say bitcoin will soar to $500,000 and surpass gold as a store of value https://markets.businessinsider.com/news/stocks/bitcoin-price-soar-winklevoss-twins-surpass-gold-store-value-btc-cryptocurrency-2020-11-1029850101

Trading veteran Peter Brandt argues that Bitcoin price is targeting $50,000 https://www.fxstreet.com/cryptocurrencies/news/trading-veteran-peter-brandt-argues-that-bitcoin-price-is-targeting-50-000-202012012308

On other hand, bearish camp says that the Bitcoin is vulnerable to a steep decline with the first local barrier around $18,000. If this one is cleared, sell orders may skyrocket creating a ripple effect across the entire market. Losing $18,000 as support will likely see BTC plummet to $13,500 or even $10,000. https://www.fxstreet.com/cryptocurrencies/news/three-reasons-why-bitcoin-price-is-about-to-crash-202012041206

My Simple Unproven Mathematical Approach

Key assumption: BTC value is assumed to grow at a linear trend over time

If you agree with the above assumption, a simple regression can be used to derive the relationship between BTC value and time:

At 64.5% explanatory power, BTC is expected to grow at $6.32 per day.

Based on this regression analysis, what will be the trajectory future value for BTC?

At current prevailing trading range $18,500-$20,000, the current BTC value appears to be relatively higher than the predicted value ($11,775 as of 31 Dec 2020)

The above analysis is a simple mathematical approach in “predicting” the future value of BTC. This should not be relied upon and it is strictly for entertainment purpose only.

DISCLAIMER: This is not an investment / trading advice or endorsement. Please refer to the general disclaimer of this blog. If in doubt, please consult with your licensed financial planner / adviser.

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