Page 178 - Data Science Algorithms in a Week

Time Series Analysis

Problems

1. Determining the trend for Bitcoin prices.

a) We are given the table for the Bitcoin prices for the years 2010 - 2017 in terms of USD.
Determine a linear trend line for these prices. The monthly price is for the first day in the
month:

Date year-month-day Bitcoin price in USD
2010-12-01 0.23

2011-06-01 9.57
2011-12-01 3.06

2012-06-01 5.27
2012-12-01 12.56
2013-06-01 129.3
2013-12-01 946.92

2014-06-01 629.02
2014-12-01 378.64
2015-06-01 223.31

2015-12-01 362.73
2016-06-01 536.42
2016-12-01 753.25

2017-06-01 2452.18
Data taken from CoinDesk price page.

b) As per the linear trend line from part a), what is the expected price of Bitcoin in 2020?
c) Discuss whether a linear line is a good indicator for the future price of Bitcoin.

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