Forecasting the Bitcoin Price via Artificial Neural Networks

Abstract

Bitcoin is the first decentralized innovative alternative digital currency, which was introduced in 2009 and is now one of the most widely used crypto-currencies. As digital assets, crypto-currencies utilize encryption technology and electronic payment system based on cryptographic proof instead of trust in a central authority, such as a government or a central bank. The Blockchain system, which is the underlying infrastructure for transferring any crypto-currency, is a shared form of recording that facilitates the recording of assets and transactions in an open network. Blockchain enables bitcoin transfer transactions from peer to peer without any intermediary, such as a bank or a transfer agency. In this study, artificial intelligence algorithms are developed in order to forecast the bitcoin price by taking into account monthly average prices of the previous three years.