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Author Topic: Logarithmic (non-linear) regression - Bitcoin estimated value  (Read 112416 times)
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btcjoin14
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January 21, 2015, 04:04:07 AM
 #61

If the guys making the charts could actually predict the market movements, they'd be rich
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January 23, 2015, 09:46:55 AM
 #62

A little patience is really all that is required here. This model is calling for 1000 USD/BTC in three months or so. Sooner or later the price will either converge with the model or will diverge so much that the model becomes absurd. So far neither has happened.

There is a certain structural validity to it, if you accept Metcalf's Law as a valuation metric and observe that users have been growing roughly linearly (reported by coinbase and others).

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January 23, 2015, 10:02:20 AM
 #63

A little patience is really all that is required here. This model is calling for 1000 USD/BTC in three months or so. Sooner or later the price will either converge with the model or will diverge so much that the model becomes absurd. So far neither has happened.

There is a certain structural validity to it, if you accept Metcalf's Law as a valuation metric and observe that users have been growing roughly linearly (reported by coinbase and others).


Agreed, certainly seems we where ahead of the curve during the last ATH.
Would be nice for some updated charts covering into 2015 ....

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January 24, 2015, 06:12:21 AM
 #64

A little patience is really all that is required here. This model is calling for 1000 USD/BTC in three months or so. Sooner or later the price will either converge with the model or will diverge so much that the model becomes absurd. So far neither has happened.

There is a certain structural validity to it, if you accept Metcalf's Law as a valuation metric and observe that users have been growing roughly linearly (reported by coinbase and others).


Agreed, certainly seems we where ahead of the curve during the last ATH.
Would be nice for some updated charts covering into 2015 ....

Same here. I'd love to see the actual chart updated. Will donate. Smiley
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January 24, 2015, 06:29:25 AM
 #65

A little patience is really all that is required here. This model is calling for 1000 USD/BTC in three months or so. Sooner or later the price will either converge with the model or will diverge so much that the model becomes absurd. So far neither has happened.

There is a certain structural validity to it, if you accept Metcalf's Law as a valuation metric and observe that users have been growing roughly linearly (reported by coinbase and others).




Arg, where's that article on Metcalfe's Law being wrong... I feel (vague, I know, I know) like it's more n log(n) than n^2.

Eh, maybe n^2 is the better model during early growth, though.

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January 24, 2015, 07:30:17 AM
 #66

A little patience is really all that is required here. This model is calling for 1000 USD/BTC in three months or so. Sooner or later the price will either converge with the model or will diverge so much that the model becomes absurd. So far neither has happened.

There is a certain structural validity to it, if you accept Metcalf's Law as a valuation metric and observe that users have been growing roughly linearly (reported by coinbase and others).



Arg, where's that article on Metcalfe's Law being wrong... I feel (vague, I know, I know) like it's more n log(n) than n^2.

Eh, maybe n^2 is the better model during early growth, though.

I'm not a big fan of Metcalfe's law as a valuation metric anyway, but I was just pointing out that this graph supports it.

I should clarify that by "a little patience is really all that is required here" I meant to see if the model works. I wasn't suggesting that I think patience is all that is needed to see high prices. I'm pretty uncertain about that.

Also, we might note that n log(n) doesn't diverge that much from n^2 if n is "small"
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January 25, 2015, 02:37:58 AM
 #67

Trolololo, I just tipped you a small amount in advance. Smiley
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January 26, 2015, 12:22:17 PM
 #68

@Trolololo you can post something like a "chart update" every 2 weeks or so to check how's the chart going and compare time-periods to know if it's following the logarithmic regression  Cheesy

This days price was falling down but it's recovering step by step, so IMAO could be nice if we can see it updated on your chart  Wink
Thanks!

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February 11, 2015, 05:28:24 AM
 #69

Can you please post an update to this?
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March 09, 2015, 02:33:16 PM
 #70

Can you please post an update to this?

bump request.

I like your graphs. Would like an update please!
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March 09, 2015, 03:13:51 PM
 #71

There has been so much divergence that to update it now would just look ridiculous. He will update it when the price rises to be more in line with his predications.

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March 09, 2015, 04:49:32 PM
Last edit: January 10, 2017, 11:55:51 AM by Trolololo
 #72

Hello everybody again.

First of all, sorry for the delay in updating the chart.

Anyhow, this is a long term chart that won't change much in a few months. Here is the update:


Donations: bitcoin:1GDBgp1qEBFH2dpxafjJmES4JHWFVpbqrR

Some thoughts:

I have used the Excel's "Solve" command to find the best possible fit.
After getting the "Solve" results, the first calculated prices (necessary to fix the value at the Genesis as close to zero as possible) have been removed to calculate a fair "R2". No more 0'98... values, but 0'91... values instead. As promised.

The "Solve" excel command makes much more iterations than I could do myself, and the result is a bit steeper regression than the older "by hand" regression.

I have put the log regression curve and the spread on the same image. At 152'40 USD/BTC, we hit the most undervalued price ever: -81%.

Faded, on the background the "old" curves (few iterations).

IMHO, the (around) 2017 regression values are much better than the linear regression values. In fact, they are an order of magnitude lower!.
On the other hand, the 2024 years values (1M$) make me dream of yatchs and girls  Wink, but a better non-always-growing-curve might suggest values of "only" 100k...  Grin

Projected (dd-mm-yyyy):
     1.000  17-01-2015
    10.000  10-04-2017
   100.000  30-04-2020
1.000.000  08-07-2024

Thank you all for your donations.
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March 09, 2015, 06:22:46 PM
 #73

It's interesting how an updated regression, in a situation where the price has been going down, and with a reportedly "fairer" R2 fit, that it would end up projecting *higher* prices than the original. That said, I do appreciate your contributions.
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March 09, 2015, 06:41:28 PM
Last edit: March 09, 2015, 07:55:03 PM by Trolololo
 #74

Great work Trolololo.

Can't see it mentioned yet, maybe it is elsewhere, but do you have a version which utilizes the "market capitalization" (monetary base), instead of the price? For the first decade this may produce a somewhat different curve.


Well, the market cap and price charts shapes are almost identical, and the regressions are quite similar:

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March 09, 2015, 06:54:55 PM
Last edit: March 09, 2015, 07:50:47 PM by Trolololo
 #75

It's interesting how an updated regression, in a situation where the price has been going down, and with a reportedly "fairer" R2 fit, that it would end up projecting *higher* prices than the original. That said, I do appreciate your contributions.

That's because it's an iterating process.

Well, in October I "hand" made about 10 iterations.
Now, Excel "Solve" command can make hundreds...

Executing "Solve":
- with data until October 2014, the "R2" is 0'9099.
- with data until March 2015, the "R2" is 0'9097.

The curve has flattened a little:

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March 09, 2015, 07:35:23 PM
Last edit: March 09, 2015, 10:31:06 PM by Trolololo
 #76

There has been so much divergence that to update it now would just look ridiculous.

No. See the new charts posted.

If I had uptated on Jan 14th (faded red) vs today (red), the difference faded is almost behind the red:



Only prices of different order of magnitude, and for some months, would significantly change the curve shape and parameters.



He will update it when the price rises to be more in line with his predications.

No.
Updating is a process that requires many hours of work.

With almost 1700 days of data prices, the values of the regression don't change much month to month.
I will update 2 o 3 times a year.

If anyone knows how to execute a "Solve" like command in a Google Datasheet, I'm all ears...

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March 09, 2015, 08:04:40 PM
 #77

According to your chart we should have reached 1000 by now! Cheesy

But really, if you're right, we've got a long way to recover...
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March 09, 2015, 08:46:49 PM
 #78

If anyone knows how to execute a "Solve" like command in a Google Datasheet, I'm all ears...



Meaning you're doing this stuff on Mathematica (or Wolfram Alpha)? Could it not be done by using an external script? I'm still an Excel guy, but using macros is something I do often. I'm not familiar with Google Datasheets though. I'm not sure if they allow for scripts to run...

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March 09, 2015, 10:06:40 PM
 #79

According to your chart we should have reached 1000 by now! Cheesy

But really, if you're right, we've got a long way to recover...


According to the log regression's trend, 1182 is today's estimated value.

You can see it here.

So the price is 76% undervalued.

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March 09, 2015, 10:32:08 PM
 #80

According to your chart we should have reached 1000 by now! Cheesy

But really, if you're right, we've got a long way to recover...


According to the log regression's trend, 1182 is today's estimated value.

You can see it here.

So the price is 76% undervalued.

i am thinking that the 1MB limit is increasingly becoming a dead-weight on the value. This roadblock to scalability is highly publicized now, and it is reasonable that large amounts of money is on the sidelines waiting to see whether Bitcoin can properly scale. The sooner v4 blocks are happening the better the environment will be for the value to return to trend.


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