Page 180 - Data Science Algorithms in a Week

Time Series Analysis

This gives us the following graph for the trend line:

As per the trend line, the expected price for Bitcoin for January 1, 2020 is 1731.1 USD.
A linear trend line is probably not a good indicator and price predictor for Bitcoin. This is
because of the many factors in play and because of the potential exponential nature often
seen in the trends in technology, for example, the number of active Facebook users and the
number of transistors in the best consumer CPU under 1000 USD.

There are three important factors that could facilitate an exponential adoption of Bitcoin
and thus drive its price upwards:

Technological maturity (scalability) - the number of transactions per second can
ensure an instant transfer, even though many people use Bitcoin to make and
receive payments
Stability - once sellers are not afraid to lose their profits if they receive payments
in Bitcoin, they are more open to accept it as currency
User-friendliness - once ordinary users can make and receive payments in
Bitcoin in a natural way, there will not be a technical barrier to using Bitcoin as
they would any other currency they are used to.

To analyze the price of Bitcoin, we would have to take much more data into consideration
and it is likely that its price will not follow a linear trend.

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