Monthly average USD/bitcoin price & trend

[Joe200]

Hi rpietila,

I would suggest that drawing a trend line through the price is not the best way to do it. A better and simple model that's in the same spirit is that the difference in the logarithm of price is independent and identically distributed Normal. For details, see here: https://bitcointalk.org/index.php?topic=600802.0

Please let me know what you think.

[bitteractor]

Respectfully request June update.

Bumping this awesome thread.

[gmx95]

Now, by applying log-scale and drawing a trendline using the linear regression with least square error, we find that the equation of the trendline is:

-2.8 + 5.2/57(number_of_months_since_Jan_2009).

- Bitcoin went from being a laggard to being overvalued in Nov, 2010.
- Highest overvaluation was reached in June, 2011, when the price was $18.5 on average, but the price trendline was only at $0.70.
- Despite the crash in 2011, actual undervaluation started only in April, 2012 and continued until Feb, 2013.
- The peak of April 2013 saw slight overvaluation, and after the peak, bitcoin has again been slightly undervalued and still is.
- Target price October 2013: $251, Nov: $310, Dec: $382.

More long-term targets:
- $1000: May 2014
- $10,000: April 2015
- $300,000: August 2016.

Do you seriously believe that these targets are achievable? May 2014 is already passed by.

[rpietila]

Now, by applying log-scale and drawing a trendline using the linear regression with least square error, we find that the equation of the trendline is:

-2.8 + 5.2/57(number_of_months_since_Jan_2009).

- Bitcoin went from being a laggard to being overvalued in Nov, 2010.
- Highest overvaluation was reached in June, 2011, when the price was $18.5 on average, but the price trendline was only at $0.70.
- Despite the crash in 2011, actual undervaluation started only in April, 2012 and continued until Feb, 2013.
- The peak of April 2013 saw slight overvaluation, and after the peak, bitcoin has again been slightly undervalued and still is.
- Target price October 2013: $251, Nov: $310, Dec: $382.

More long-term targets:
- $1000: May 2014
- $10,000: April 2015
- $300,000: August 2016.

Do you seriously believe that these targets are achievable? May 2014 is already passed by.

That was written in Oct-13. If you don't recall, $1k was reached in the following month. Reaching $10k by Apr-15 is nothing, and the only reason that I don't bet with people for the outcome, is that simple investing in bitcoins gives me much better odds 

[selene72]

$1000 by 2014 it is

[DavidHume]

Now, by applying log-scale and drawing a trendline using the linear regression with least square error, we find that the equation of the trendline is:

-2.8 + 5.2/57(number_of_months_since_Jan_2009).

- Bitcoin went from being a laggard to being overvalued in Nov, 2010.
- Highest overvaluation was reached in June, 2011, when the price was $18.5 on average, but the price trendline was only at $0.70.
- Despite the crash in 2011, actual undervaluation started only in April, 2012 and continued until Feb, 2013.
- The peak of April 2013 saw slight overvaluation, and after the peak, bitcoin has again been slightly undervalued and still is.
- Target price October 2013: $251, Nov: $310, Dec: $382.

More long-term targets:
- $1000: May 2014
- $10,000: April 2015
- $300,000: August 2016.

Do you seriously believe that these targets are achievable? May 2014 is already passed by.

That was written in Oct-13. If you don't recall, $1k was reached in the following month. Reaching $10k by Apr-15 is nothing, and the only reason that I don't bet with people for the outcome, is that simple investing in bitcoins gives me much better odds 

The 300k target is unrealistic expectation.

[bitteractor]

I had no idea shaking this tree would wake up so many poop-throwing trolls!   

What's awesome about bitcointalk?  You can ignore posters.   

rpietile adds value to these boards.  He deduces outcomes based on history and numbers.

If others would like to contribute something other than opinions (i.e. price targets with dates) as rpietile has done (signing his name to his forecasts), I look forward to reading it.

Otherwise, STFU.

[molecular]

The 300k target is unrealistic expectation.

unrealistic?



It sure isn't incompatible with current facts.

By that definition, we'll only know wether it has been a realistic expectation after the fact.

You probably meant to say: "that 300k target is improbable from my point of view"?

[Bagatell]

E-Prime FTW  

[nicked]

I (would like) someone to start an E-Prime thread.

[bitminister123]

The 300k target is unrealistic expectation.

unrealistic?

https://i.imgur.com/m1HBUz7.png

It sure isn't incompatible with current facts.

By that definition, we'll only know wether it has been a realistic expectation after the fact.

You probably meant to say: "that 300k target is improbable from my point of view"?

300k is unrealistic now as $300 was unrealistic january last year, the same way todays mass usage of the internet was unrealistic in the mid 90's.

Bitcoin is a revolution, once underbanked economies in developing nations start to have access to bitcoin the likes of Western Union will be a thing of the past, similar to encarter which was replaced by its p2p rival Wikipedia.

Great community by the way, loving this forum

[Its About Sharing]

Now, by applying log-scale and drawing a trendline using the linear regression with least square error, we find that the equation of the trendline is:

-2.8 + 5.2/57(number_of_months_since_Jan_2009).

- Bitcoin went from being a laggard to being overvalued in Nov, 2010.
- Highest overvaluation was reached in June, 2011, when the price was $18.5 on average, but the price trendline was only at $0.70.
- Despite the crash in 2011, actual undervaluation started only in April, 2012 and continued until Feb, 2013.
- The peak of April 2013 saw slight overvaluation, and after the peak, bitcoin has again been slightly undervalued and still is.
- Target price October 2013: $251, Nov: $310, Dec: $382.

More long-term targets:
- $1000: May 2014
- $10,000: April 2015
- $300,000: August 2016.

Do you seriously believe that these targets are achievable? May 2014 is already passed by.

That was written in Oct-13. If you don't recall, $1k was reached in the following month. Reaching $10k by Apr-15 is nothing, and the only reason that I don't bet with people for the outcome, is that simple investing in bitcoins gives me much better odds 

The 300k target is unrealistic expectation.

Great video:
Bitcoin 101 - Modelling the Price of Bitcoin - Is a $100,000 bitcoin possible?
http://m.youtube.com/watch?v=g2nXgK34HIM

Check out the online price predictor, with adjustable variables - it helps to understand these "crazy" price predictions.

[Skele]

$1000 by 2014 it is

By its end, maybe...
$4000 - 5000 by 2016
$70 000 by 2018

FiFa World Cup Russia, Here we go...

[rpietila]

I just updated my personal sheet tracking these things. The parameters of that one:
- flat price 0.005 assumed until Mt.Gox opens
- for 7/2010-2012, Mt.Gox prices used
- for 2013, three exchanges
- for 2014, Bitstamp only
- daily VWAP
- first day 2009-1-3, the first day of Bitcoin; last day 2014-7-9, the 2014th day of Bitcoin

The exponential trendline for this time:
USD/BTC = exp(-2.869800 + 0.003012 * D), D being the number of days

R^2 = 0.934183

The trendline is at $1583.

At $623, we are currently -0.405 units below the trend.

For comparison, the max we ever went below the trend prior to the first 2013 runup, was -0.573.
Prior to the second 2013 runup, -0.341.


The maximum downside (greatest drop in price experienced ever after) after a day when price has already been at a low of -0.4 or lower, is -19%, experienced in 2012-10-5 to 2012-10-26, when the price dropped from $12.75 to $10.31.

This is comparable to the price going from $623 to $504 this month. This would put us on par with the maximum historical downside from already such a low point as $623 represents in the trendline.

I will not go to the upside calculations now, just leave the closing remark:


TL;DR: Historically, buying at a price such as this has represented a very low risk entry point with very limited downside in dollar terms.

Historically, selling at a price such as this (for any other purpose than covering immediate needs) has been counterproductive, as it is very likely that you will get a better or at least not much worse a deal; 1, 2, 3, 6, or any number of months in the future.

[holomen]

Thank you for your answer Rp, It's a pleasure to read in depth explanation.

So the maximum downside longest-lasted 3 weeks.
 “Patience is bitter, but its fruit is sweet.”
― Aristotle

You gave a good advice for the readers.

[rpietila]

Thank you for your answer Rp, It's a pleasure to read in depth explanation.

So the maximum downside longest-lasted 3 weeks.

Actually the longest duration ever for being down on your investment, provided that it was bought at -0.4 or lower, is 61 days (starting from the same day as above, calculated so that from 62nd day on, price has never been below the original purchase price).

Would you buy if you are guaranteed to have positive return for every holding period in excess of 2 months?  

[holomen]

Thank you for your answer Rp, It's a pleasure to read in depth explanation.

So the maximum downside longest-lasted 3 weeks.

Actually the longest duration ever for being down on your investment, provided that it was bought at -0.4 or lower, is 61 days (starting from the same day as above, calculated so that from 62nd day on, price has never been below the original purchase price).

Would you buy if you are guaranteed to have positive return for every holding period in excess of 2 months?  

I'm already trading at the near similar terms but if you can believe it's not BTC.

I'm trading used dental equipment internationaly on eBay. I currently get 20-50% ROI/2months. Of course, market availability of below-market price items is small.
And the pricing of the items is significant, but every profit I make goes to BTC as I can't significantly reduce the stock and at the same time working capital to generate modest returns ..

It will be a pleasure look back few years later.

[wachtwoord]

Thank you for your answer Rp, It's a pleasure to read in depth explanation.

So the maximum downside longest-lasted 3 weeks.

Actually the longest duration ever for being down on your investment, provided that it was bought at -0.4 or lower, is 61 days (starting from the same day as above, calculated so that from 62nd day on, price has never been below the original purchase price).

Would you buy if you are guaranteed to have positive return for every holding period in excess of 2 months?  

I'm already trading at the near similar terms but if you can believe it's not BTC.

I'm trading used dental equipment internationaly on eBay. I currently get 20-50% ROI/2months. Of course, market availability of below-market price items is small.
And the pricing of the items is significant, but every profit I make goes to BTC as I can't significantly reduce the stock and at the same time working capital to generate modest returns ..

It will be a pleasure look back few years later.

I can imagine. Good for you

[rpietila]

The adjusting of the trendline to the recent sluggish performance has taken its toll from the top projections. The absolute top value of +0.45 only reaches $7000 in 2014-9-13 instead of August projected earlier.

[BitChick]

The adjusting of the trendline to the recent sluggish performance has taken its toll from the top projections. The absolute top value of +0.45 only reaches $7000 in 2014-9-13 instead of August projected earlier.

But what if the Winklevoss ETF opens before then or something else that triggers a huge run?  We could see this sooner, or even a higher amount depending on other circumstances couldn't we?

Regardless, $7000 by September is nothing to cry about.