Metaverse: Cryptocurrency Price Analysis Using Monte Carlo Simulation

Abstract

Among the most recent and quickly growing industries worldwide is metaverse cryptocurrency. Despite the fact that the first cryptocurrency namely Bitcoin was only developed 13 years ago, the use and value of digital currencies have increased dramatically. Their marketplaces are among the most intricate and unpredictable markets over the globe. Despite being a decentralized system that does not have a single point of failure, it is commonly known that many individuals who invest in it lose their money. In this article, we attempt to use Monte Carlo simulation to forecast the price of a selected few well-known cryptocurrencies for the next 1000 days namely Doge coin (DOGE), Ethereum (ETH), Litecoin (LTC) and HEX.The mean return on a cryptocurrency and the standard deviation of past returns are the two key factors that affect how the simulations end out. Additionally, the study evaluates the projected returns for cryptocurrencies as well as the correlation between all the different currencies. It also looks into the statistics of cryptocurrency, average true range, volatility and cumulative returns. By calculating the growth rate and sharpe ratio, the entire research would also assist investors in deciding if they should purchase a specific cryptocurrency or not.