CAUTIOUS OPTIMISM FOR A FIVEFOLD INCREASE
In results published by data scientist Xoel López Barata who conducted the investigation, Bitcoin appears set to hit $55,530 by the end of this year.
By contrast, the probability the largest cryptocurrency will be equal to or lower than at present is under 10%.
The rather more scientific evaluation joins the plethora of forecasts from various well-known figures in cryptocurrency and beyond, some of which remain wildly high despite Bitcoin’s recent halving in price.
Most recently, Trace Mayer produced popular findings that a 2018 Bitcoin costing over $14,340 would be “overvalued,” but which nonetheless saw the cryptocurrency having the potential to go over $100,000.
MATH OR MUSINGS?
Barata used a Monte Carlo simulation with so-called “random walks” to unearth the potential for Bitcoin’s price future, refining the raw data to produce a graph of USD rates ranked by probability.
The results of the walks – or simulated price distributions created on the premise that Bitcoin’s future behavior would mimic that of its past – then delivered a target just over $55,000.
“It’s important to note that this estimation doesn’t have to be taken to the letter and it’s better used as a way to find confidence intervals on where the future distribution where be,” Barata added in cautionary comments.
“In this case an 80% confidence interval for the price of bitcoin would be between $13,200 and $271,277.”
Despite current prices heralding a fresh wave of ‘bubble’ warnings from mainstream media and skeptics such as Robert Shiller over the past week, little panic was seen among long-term investors.
A curious metric even pointed to Bitcoin merely repeating behavior it had exhibited during the second week of January every year for the past four years, itself adding further weight to Barata’s methodology.
Source: http://bitcoinist.com/bitcoin-price-55k-study-likely-2018/