Topic: Logarithmic (non-linear) regression - Bitcoin estimated value - page 11. (Read 117628 times)

Unless you're willing to propose some sort of non-standard regression function that makes sense as applied to the Bitcoin market, complaints about 2081% and -81% are unfounded here. The fact that the Bitcoin market has volatility with respect to the regression trend does not mean that this chart offers nothing worthwhile in terms of representing reality. To get an equation to follow the price more closely, you'd have to throw in something more exotic, like an oscillation component or something, and doing so just to get a better fit is often not the best tactic.

I know that this is your time window, but still my question that remains unanswered is: do you have enough data so far, to make such regression reliable?
So far you had like 2081% above the line and 81% to the downside, which indicates that the fit to the curve is far from acceptable in terms of prediction error. Meaning probably you don't have enough 'training data' to make any reliable predictions for the future.
Just to illustrate what I am talking about, try a small exercise: take only first two years of data and make the regression based on that. Compare that to the real results in terms of errors. You will probably see even worse results in terms of how far it is from reality.

I think this is a good approach, although I believe that we may see a behaviour that diverges from the regression line when we hit $10k or $100k...

This is an interesting way to approach the 'real' price of Bitcoin... I've seen many people do similar things. I guess one of the most prominent being rpietila, you know the guy with the castle and the pink car. Haha, man... he's awesome!

As said before, this log regression just tries to have a better estimation of bitcoin's value than the linear one. Specially for a 2 or 3 years horizon.

For a longer term value, it's worth to take a look at James d'Angelo's "Bitcoin Price Model".

Core dev need to come to agreement on the details, so nothing is "decided", although Gavin has made a proposal which has reasonable support:

60% for, 20% against, 20% whatever

So, only 20% are firmly against changing the limit, which is the same percentage as the polls 2 years ago.

I have a question to the OP: what are the underlying assumptions that make this log regression's trend held over the entire period depicted?
It is hard to believe, taking out some severe doom-like event to the US dollar, to see the price of Bitcoin reaching $100k by 2020. Not even to talk about the valuations beyond the 2020. Isn't it that you try to estimate the trend for much longer time period (next 10, 20, 50 years), having the data from a relatively short period of time (2010 till now) and thus committing a huge prediction error, due to the insufficient amount of data?

Are the debates on this done? There were half people that said yes and the other half said no. Is it decided for sure then?

i am thinking that the 1MB limit is increasingly becoming a dead-weight on the value. This roadblock to scalability is highly publicized now, and it is reasonable that large amounts of money is on the sidelines waiting to see whether Bitcoin can properly scale. The sooner v4 blocks are happening the better the environment will be for the value to return to trend.

According to the log regression's trend, 1182 is today's estimated value.

You can see it here.

So the price is 76% undervalued.

Meaning you're doing this stuff on Mathematica (or Wolfram Alpha)? Could it not be done by using an external script? I'm still an Excel guy, but using macros is something I do often. I'm not familiar with Google Datasheets though. I'm not sure if they allow for scripts to run...

According to your chart we should have reached 1000 by now!

But really, if you're right, we've got a long way to recover...

No. See the new charts posted.

If I had uptated on Jan 14th (faded red) vs today (red), the difference faded is almost behind the red:



Only prices of different order of magnitude, and for some months, would significantly change the curve shape and parameters.




No.
Updating is a process that requires many hours of work.

With almost 1700 days of data prices, the values of the regression don't change much month to month.
I will update 2 o 3 times a year.

If anyone knows how to execute a "Solve" like command in a Google Datasheet, I'm all ears...

That's because it's an iterating process.

Well, in October I "hand" made about 10 iterations.
Now, Excel "Solve" command can make hundreds...

Executing "Solve":
- with data until October 2014, the "R2" is 0'9099.
- with data until March 2015, the "R2" is 0'9097.

The curve has flattened a little:

Well, the market cap and price charts shapes are almost identical, and the regressions are quite similar:

It's interesting how an updated regression, in a situation where the price has been going down, and with a reportedly "fairer" R2 fit, that it would end up projecting *higher* prices than the original. That said, I do appreciate your contributions.

Hello everybody again.

First of all, sorry for the delay in updating the chart.

Anyhow, this is a long term chart that won't change much in a few months. Here is the update:


Donations: bitcoin:1GDBgp1qEBFH2dpxafjJmES4JHWFVpbqrR

Some thoughts:

I have used the Excel's "Solve" command to find the best possible fit.
After getting the "Solve" results, the first calculated prices (necessary to fix the value at the Genesis as close to zero as possible) have been removed to calculate a fair "R2". No more 0'98... values, but 0'91... values instead. As promised.

The "Solve" excel command makes much more iterations than I could do myself, and the result is a bit steeper regression than the older "by hand" regression.

I have put the log regression curve and the spread on the same image. At 152'40 USD/BTC, we hit the most undervalued price ever: -81%.

Faded, on the background the "old" curves (few iterations).

IMHO, the (around) 2017 regression values are much better than the linear regression values. In fact, they are an order of magnitude lower!.
On the other hand, the 2024 years values (1M$) make me dream of yatchs and girls  , but a better non-always-growing-curve might suggest values of "only" 100k...  

Projected (dd-mm-yyyy):
     1.000  17-01-2015
    10.000  10-04-2017
   100.000  30-04-2020
1.000.000  08-07-2024

Thank you all for your donations.

There has been so much divergence that to update it now would just look ridiculous. He will update it when the price rises to be more in line with his predications.

bump request.

I like your graphs. Would like an update please!

Can you please post an update to this?