Performance Comparison of GRU and LSTM Methods for Predicting Bitcoin Exchange Rate against US Dollar

Abstract

This research aims to compare the performance between the Gated Recurrent Unit (GRU) and Long Short-Term Memory (LSTM) methods in predicting the Bitcoin exchange rate against the US Dollar (BTC-USD). The data used comes from Yahoo Finance for the period 2017-2022. Each model is built with a comparable architecture and evaluated using Root Mean Square Error (RMSE), Mean Absolute Error (MAE), Mean Absolute Percentage Error (MAPE), coefficient of determination (R²), and prediction accuracy metrics. The results show that the LSTM model performed better on the test data with a MAPE of 3.80% and an accuracy of 96.20%, while the GRU model achieved a MAPE of 5.13% and an accuracy of 94.87%. Although the GRU model performed better on the training data, the LSTM model showed better generalization ability on the testing data. This research provides important insights into the selection of the optimal recurrent neural network architecture for Bitcoin exchange rate prediction which is known for its high volatility.