10 Price Predictions for 10 Top Cryptocurrencies — Aug 2018
So, you’re sitting at your computer with money to invest.
You have made some good money already in the market, but you want more.
Cryptocurrencies reached a record $800 billion in market value then came crashing back down to earth and sit right around $200-$300 billion today.
The price movement of top currencies remains a mystery. But it doesn’t have to be.
THE PAIN OF UNCERTAINTY
Cryptocurrencies are volatile, irrational beasts.
Simple methods of forecasting grossly over/underestimate the potential of a volatile currency.
For example, moving averages are used frequently to estimate future prices. Moving averages, however, suffer from many pitfalls that make them poor estimators of volatile markets.
Every great and successful investor has a plan. You will add one more tool to your arsenal today.
A BETTER METHOD FOR ESTIMATING CRYPTO PRICES
In my prior article about estimating the movement of Bitcoin Prices, I spoke of a method that is used frequently in the stock world to estimate prices.
This method is a Monte Carlo simulation using the geometric Brownian motion model.
I won’t cover off on the full methodology here, but essentially I am going to:
- Get historical daily prices for 10 top cryptocurrencies
- Calculate daily returns
- Simulate a day, month, and year
- Simulate a day, month, and year 1,000 times each
By the end of the article, you will have the following:
- A 1-day, 1-month, and 1-year simulation of top cryptocurrencies
- Likely price range of each cryptocurrency
- A downloadable model to complete yourself
A note on forecasting, simulations, and recommendations: Monte Carlo simulations are to be used as guidelines and tools, not as gospel. I am not offering financial or investing advice.
BITCOIN
What is Bitcoin?
You know what Bitcoin is, stop it.
One-Month Simulation
One-Month Simulated 1,000 Times
Simulation Statistics
Here are the results of simulating Daily, Monthly, and Yearly coin prices 1,000 times each.
Verdict
In 95% of model simulations, the price of Bitcoin fell between $3,959, and $12,626 with a median of $6,970 over a 1-month time period.
BITCOIN CASH
What is Bitcoin Cash?
From the Bitcoin Cash project website:
“Bitcoin Cash is peer-to-peer electronic cash for the Internet. It is fully decentralized, with no central bank and requires no trusted third parties to operate.”
Really, it was an additional currency that was created after a fork from Bitcoin core.
One-Month Simulation
One-Month Simulated 1,000 Times
Simulation Statistics
Here are the results of simulating Daily, Monthly, and Yearly coin prices 1,000 times each.
Verdict
In 95% of model simulations, the price of Bitcoin Cash fell between $253, and $1,501 with a median of $624 over a 1-month time period.
ETHEREUM
What is Ethereum?
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.
Ethereum has been busy recently. Multiple steps have been pushed in motion for the upcoming large change — reaching a new consensus method.
From Jordan Daniel at ethnews.com:
Ethereum’s Byzantium hard fork was only one half of a two-part process designed to transition the decentralized application platform to a new method for reaching consensus — proof-of-stake. The next hard fork, called Constantinople, was recently discussed during an Ethereum core developer meeting and could include Vitalik Buterin’s Casper update.
One-Month Simulation
One-Month Simulated 1,000 Times
Simulation Statistics
Here are the results of simulating Daily, Monthly, and Yearly coin prices 1,000 times each.
Verdict
In 95% of model simulations, the price of Ethereum fell between $200, and $827 with a median of $405 over a 1-month time period.
EOS
What is EOS?
EOS is a blockchain-based, decentralized operating system, designed to support commercial-scale decentralized applications by providing all of the necessary core functionality, enabling businesses to build blockchain applications in a way similar to web-based applications.
One-Month Simulation
One-Month Simulated 1,000 Times
Simulation Statistics
Here are the results of simulating Daily, Monthly, and Yearly coin prices 1,000 times each.
Verdict
In 95% of model simulations, the price of EOS fell between $2.48, and $19.92 with a median of $6.78 over a 1-month time period.
LITECOIN
What is Litecoin?
Litecoin’s claim to fame is faster transaction processing times. It uses a scrypt-based mining proof-of-work algorithm to target the regular computers and GPUs most people already have.
The ability to target regular computers and GPU’s happens to be a huge differentiator from the crowded mining population of Bitcoin.
One-Month Simulation
One-Month Simulated 1,000 Times
Simulation Statistics
Here are the results of simulating Daily, Monthly, and Yearly coin prices 1,000 times each.
Verdict
In 95% of model simulations, the price of Litecoin fell between $34.45, and $131.88 with a median of $67.53 over a 1-month time period.
RIPPLE
What is Ripple?
Ripple is a system created for banks to enable immediate payments and lower costs.
The vision of the Ripple creators is to allow a bank transfer in a few seconds (instead of the horribly annoying 2–3 business days).
Of note, is that Ripple is a U.S. based company. From the xrphodor blog:
Ripple is a US-based company.
Why is this an important point to consider? A US-based company like Ripple is subject to some very stringent laws regarding securities trading and money transmission. These include requirements that define how Ripple might interact with crypto markets and both institutional and retail crypto traders.
One-Month Simulation
One-Month Simulated 1,000 Times
Simulation Statistics
Here are the results of simulating Daily, Monthly, and Yearly coin prices 1,000 times each.
Verdict
In 95% of model simulations, the price of Ripple fell between $0.13, and $1.05 with a median of $0.37 over a 1-month time period.
STELLAR
What is Stellar?
Stellar is a platform that connects banks, payments systems, and people. Integrate to move money quickly, reliably, and at almost no cost.
XLM is a completely decentralized consensus platform. It is designed to support any type of currency. It has a built in decentralized exchange that can be used to trade any type of currency or asset.
One-Month Simulation
One-Month Simulated 1,000 Times
Simulation Statistics
Here are the results of simulating Daily, Monthly, and Yearly coin prices 1,000 times each.
Verdict
In 95% of model simulations, the price of Stellar fell between $0.11, and $0.81 with a median of $0.29 over a 1-month time period.
IOTA
What is IOTA?
IOTA is a public distributed ledger that stores transactions in a directed acyclic graph (DAG) structure, called a Tangle. The Tangle is used in place of the blockchain structure commonly used by other cryptocurrencies, such as Bitcoin.
IOTA is a cryptocurrency designed specifically for the Internet of Things (IoT) that can be used for the secure sale and sharing of data streams.
One-Month Simulation
One-Month Simulated 1,000 Times
Simulation Statistics
Here are the results of simulating Daily, Monthly, and Yearly coin prices 1,000 times each.
Verdict
In 95% of model simulations, the price of IOTA fell between $0.24, and $1.39 with a median of $0.58 over a 1-month time period.
QTUM
What is QTUM?
Qtum is an open source Blockchain project that is developed by the Singapore-based Qtum Foundation. Qtum is a hybrid blockchain application platform.
Qtum’s core technology combines a fork of bitcoin core, an Account Abstraction Layer allowing for multiple Virtual Machines including the Ethereum Virtual Machine (EVM) and Proof-of-Stake consensus aimed at tackling industry use cases.
One-Month Simulation
One-Month Simulated 1,000 Times
Simulation Statistics
Here are the results of simulating Daily, Monthly, and Yearly coin prices 1,000 times each.
Verdict
In 95% of model simulations, the price of QTUM fell between $1.51, and $15.34 with a median of $4.89 over a 1-month time period.
NEO
What is NEO?
NEO (formerly known as AntShares) is a smart asset platform and the first open source public blockchain project in China. Smart assets are the combination of smart blockchain contracts and digital assets.
One-Month Simulation
One-Month Simulated 1,000 Times
Simulation Stats
Here are the results of simulating Daily, Monthly, and Yearly coin prices 1,000 times each.
Verdict
In 95% of model simulations, the price of NEO fell between $9.67, and $52.02 with a median of $23.49 over a 1-month time period.
DASH
What is Dash?
From CoinLib:
Dash (formerly known as Darkcoin and XCoin) is an open source peer-to-peer cryptocurrency. On top of Bitcoin’s feature set, it currently offers instant transactions (InstantSend), private transactions (PrivateSend) and operates a self-governing and self-funding model that enables the Dash network to pay individuals and businesses to perform work that adds value to the network.
Dash’s decentralized governance and budgeting system makes it a decentralized autonomous organization (DAO).
One-Month Simulation
One-Month Simulated 1,000 Times
Simulation Statistics
Here are the results of simulating Daily, Monthly, and Yearly coin prices 1,000 times each.
Verdict
In 95% of model simulations, the price of Dash fell between $15.23, and $3,125 with a median of $198 over a 1-month time period.
MONERO
What is Monero?
Monero attempts to solve privacy and fungibility issues that persist in Bitcoin.
Part of the algorithm for Monero automatically mixes transactions with previous transactions and does this by implementing ring signatures.
One-Month Simulation
One-Month Simulated 1,000 Times
Simulation Stats
Here are the results of simulating Daily, Monthly, and Yearly coin prices 1,000 times each.
Verdict
In 95% of model simulations, the price of Monero fell between $24.20, and $508.99 with a median of $115.44 over a 1-month time period.
Zcash
What is Zcash?
From the Blockchainhub infographic:
Zcash is a permissionless cryptocurrency that can fully protect the privacy of transactions using zero-knowledge cryptography.
One-Month Simulation
One-Month Simulated 1,000 Times
Simulation Statistics
Here are the results of simulating Daily, Monthly, and Yearly coin prices 1,000 times each.
Verdict
In 95% of model simulations, the price of Zcash fell between $49.34, and $419.23 with a median of $147.27 over a 1-month time period.
Bonus: CARDANO
What is Cardano?
From Coincheckup:
Cardano is a decentralised public blockchain and cryptocurrency project and is fully open source. Cardano is developing a smart contract platform which seeks to deliver more advanced features than any protocol previously developed.
One-Month Simulation
One-Month Simulated 1,000 Times
Simulation Statistics
Here are the results of simulating Daily, Monthly, and Yearly coin prices 1,000 times each.
Verdict
In 95% of model simulations, the price of Cardano fell between $0.04, and $0.42 with a median of $0.13 over a 1-month time period.
YOUR VERY OWN FORECASTING TOOL
Since i’m so nice, I went ahead and created a forecasting tool for you to use.
SERVICES USED:
- Microsoft Excel 2016 for Windows or Mac, or Excel Online
- Cryptosheets Excel Add-in
- Cryptocompare API
Full disclosure: The Excel add-in has a free tier with a limited 100 requests, and a paid upgrade option past that. However, no one should be refused access on the basis of money (especially true for students and less fortunate). Send me a message, and I will make sure you are not left in the dark.
A NOTE ON SECURITY
Users have expressed hesitation about downloading an Excel workbook on their main computer, so I will attempt to ease those concerns:
- I am located in the U.S., and my business is registered in the state of Maryland
- If this were malicious, people would have downvoted the add-in into oblivion, and it would have been removed from the store
- The Cryptosheets add-in is located on the official Microsoft Appsource store, which requires a rigorous 124 point validation process before it is accepted
- If you are still worried, you can open it within a virtual machine and test it first, or run the file through an online virus checking service such as Virus Total
WHAT IT PULLS:
- Up to 5 year history of ~10 different cryptocurrencies
- 1-Month simulation of prices
- 1-Month simulation of returns
- 1-Month simulation ran 1,000 times
GETTING THE SPREADSHEET TO WORK FOR YOU
1. Install the Cryptosheets add-in for Microsoft Excel
- Click this link to download the Cryptosheets Excel Add-in
- Follow the installation instructions included with the add-in and log-in
2. Log-in to Cryptosheets using Google, or your regular e-mail
- In the Cryptosheets ribbon, click “View Dashboard”. Choose Google, or signup manually
3. Upon successful log-in, refresh the Cryptocompare pull
- In the Cryptosheets ribbon click Dashboard
- Login to the service through Google, or sign-up option
- Click the orange + button
- Click Cryptocompare OHLCV
- Choose your pair. By default, the document uses Bitcoin/US Dollar
- Click the Days Selected dropdown and choose 5 years (Last 1825 days)
- Click the Table Headers toggle
- Click into A1 of the “Data” tab, click Highlight Range, and Place Data
- Verify that data has updated
- You also have the option to choose a timed refresh interval.
TROUBLESHOOTING
When I open the add-in, I get a white screen…why?
Most likely this is due to an ad blocker (such as uBlock Origin or Bitdefender). On Windows, the add-in relies on Internet Explorer stability to function properly. Make sure nothing is blocking Internet Explorer.
My add-in is stuck in a “Loading” loop…how do I fix it?
See the tutorial here to fix: https://intercom.help/cryptosheets/frequently-asked-questions/troubleshooting/my-add-in-is-stuck-in-a-loading-loophow-do-i-fix-it
CONCLUSION
Whether you are investing in Bitcoin, Ethereum, or SpankCoin, it is imperative to have a plan. Most notably, a worst-case scenario.
The Monte Carlo simulation is a fantastic way to get a range of prices for a cryptocurrency. And after reading this, you can see how the final values change drastically depending on what you are looking at.
I urge you to download the sheet and try your own hand at simulating different coins.
Cheers, and happy hunting!
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