ASB-9037 RESEARCH METHODS
CRPTO-CASTING ASSIGNMENT
PRICE FORECAST METHODOLOGY:
A. PERSONAL PRICE FORECASTS
My personal price forecasts for Bitcoin and XRP were derived as follows:
a. First, I downloaded historical daily and monthly price data for Bitcoin and XRP from Yahoo Finance;
Bitcoin Price Movements - 2014 to 2021
XRP Price Movement: 2014 to 2021
50000
40000
30000
20000
10000
0
4
3
2
1
0
b. Next, I downloaded Google Trends Search Volume Index (SVI) for Bitcoin and XRP;
Google Trends SVI for Bitcoin
Google Trends SVI for XRP
2020-12
2020-08
2020-04
2019-12
2019-08
2019-04
2018-12
2018-08
2018-04
2017-12
2017-08
2017-04
2016-12
120
100
80
60
40
20
0
2016-08
120
100
80
60
40
20
0
c. Next, I computed three different price forecasts for 2nd March 2021 based on the following:
1. A simple Moving Average of the daily prices of Bitcoin and XRP, using the excel “Forecast Sheet”
function;
2. A simple Moving average of monthly prices of Bitcoin and XRP, also computed with the “Forecast
Sheet” function in Excel; and
3. A linear regression of lagged values of monthly Bitcoin prices with Google Trends Search Volume
Index (SVI) for both cryptocurrencies.
 For Bitcoin, the resulting regression equation was
Bitcoin Price at time [t] = 167.014 - 67.2897*SVI[t-1] + 1.22218*Bitcoin Price at time [t-1] + e[t]
 For XRP, the resulting regression equation was
XRP Price at time [t] = 0.139012 + 0.000589753*SVI[t-1] + 0.519901*XRP Price at time [t-1] + e[t]
d. Finally, I computed the mean of the three forecasts
Classified as Confidential
ASB-9037 RESEARCH METHODS
CRPTO-CASTING ASSIGNMENT
Results:
The data and models used are in in attached spreadsheets.
Bitcoin:
 Price forecast from Moving Average of Daily Bitcoin Price Data = $36,931.58
 Price forecast from Moving Average of Monthly Bitcoin Price Data: $37,003.22
 Price forecast from linear regression with Google Trends SVI: $39,485.09
 Mean of the three forecasts: $37,806.63
XRP:




Price forecast from Moving Average of Daily Price Data = $0.30
Price forecast from Moving Average of Monthly Price Data: $0.32
Price forecast from linear regression with Google Trends SVI: $0.34
Mean of the three forecasts: $0.32
Factors that I took into consideration in choosing the model for predicting the prices include:
 The volatility of cryptocurrency price movements;
 The factors that drive the volatility;
 The impact of positive or negative news on market sentiments.
B. SECONDARY PRICE FORECASTS FROM EXPERTS FOR 2ND MARCH 2021:
BITCOIN
1. The Economy Forecast Agency: $39,103 (see https://longforecast.com/bitcoin-price-predictions-2017-20182019-btc-to-usd)
2. Wallet Investor: $34,036 (see https://walletinvestor.com/forecast/bitcoin-prediction-data)
3. Digital Coin: $55,518.91 (see https://digitalcoinprice.com/forecast/bitcoin#tab_view)
XRP
1.
The Economy Forecast Agency: $0.34 (see https://longforecast.com/ripple-price-prediction-2018-2019-20202021-xrp-to-usd)
2. Wallet Investor: $0.29 (see https://walletinvestor.com/forecast/xrp-prediction)- Here, the latest price forecast for
XRP is for 3rd Feb, 2021.
3. Digital Coin: $0.47 (see https://digitalcoinprice.com/forecast/xrp)
C. FINAL FORECASTS:
The final forecast for each cryptocurrency is a weighted average of the four forecasts, i.e. my personal
forecast, the Economy Forecast Agency, Wallet Investor and Digital Coin. The weightings assigned as well as
the weighting criteria are described below
i. My personal forecast; weight assigned 20%
Classified as Confidential
ASB-9037 RESEARCH METHODS
CRPTO-CASTING ASSIGNMENT
ii. The Economy Forecast Agency: 50%. This is because their forecast is based on a broad range of
factors, as stated on their website. It appears to be the most robust of the four forecasts.
iii. Wallet Investor: 20%: The forecast is based on an AI methodology. However, the factors
considered in the generating the forecasts are not disclosed on the website.
iv. Digital Coin: 10%: This was assigned the lowest weight because the forecast methodology was
not disclosed and the forecasts appeared to be overly bullish.
Based on the above weighting,
 My final forecast for Bitcoin price is as follows:
= (0.2* $37,806.63) + (0.5*$39,103) + (0.2*$34,036) +(0.1*$55,518.91)
= $39,471.92

My final forecast for XRP price is as follows:
= (0.2* $0.32) + (0.5*$0.34) + (0.2*$0.39) +(0.1*$0.47)
= $0.36
Classified as Confidential