Abstract: Bitcoin is one of the most popular and valuable cryptocurrency in the current financial market, attracting traders for investment and thereby opening new research opportunities for researchers. Countless research works have been performed on Bitcoin price prediction with different machine learning prediction algorithms. For the research: relevant features are taken from the dataset having strong correlation with Bitcoin prices and random data chunks are then selected to train and test the model. The random data which has been selected for model training, may cause unfitting outcomes thus reducing the price prediction accuracy.
Non-fungible token (NFT) bubbles are a problematic issue, and this study aims to predict NFT bubbles using an extended log-periodic power law singularity (LPPLS) model. The classic LPPLS model targets the endogenous nature of bubbles caused by the mimetic behavior of investors without external influences; however, the extended model attempts to incorporate exogenous influences. First, we compare the performance of the two models for NFT price prediction. The exogeneous variable in the extended model is cryptocurrency volatility. Then, we calculate the bubble confidence using both models. The results show that the explanatory power and forecasting accuracy of the extended model are superior in all projects. We also find that the bubble confidence indicator reinforces the results of bubble prediction.
This paper studies the optimal liquidation of stocks in the presence of temporary and permanent price impacts, and we focus in the case of cryptocurrencies. We start by presenting analytical solutions to the problem with linear temporary impact, and linear and quadratic permanent impact. Then, using data from the order book of the BNB cryptocurrency, we estimate the functional form of the temporary and permanent price impact in three different scenarios: underestimation, overestimation and average estimation, finding different functional forms for each scenario. Using finite differences and optimal policy iteration, we solve the problem numerically and observe interesting changes in the optimal liquidation policy when applying calibrated linear and power forms for the temporary and permanent price impacts. Then, with these optimal policies, we identify optimal liquidation trajectories and simulate the liquidation of initial inventories to compare the performance among the optimal strategies under different parametrizations and against a naive strategy. Finally, we characterize the optimal policies based on the functional form of the inventory and find that policies generating the highest revenue are those starting with a low trading rate and increasing it as time passes.
The purpose of this study is to examine the efficacy of an online stock trading platform in enhancing the financial literacy of those with limited financial knowledge. To this end, an intelligent system is proposed which utilizes social media sentiment analysis, price tracker systems, and machine learning techniques to generate cryptocurrency trading signals. The system includes a live price visualization component for displaying cryptocurrency price data and a prediction function that provides both short-term and long-term trading signals based on the sentiment score of the previous day’s cryptocurrency tweets. Additionally, a method for refining the sentiment model result is outlined. The results illustrate that it is feasible to incorporate the Tweets sentiment of cryptocurrencies into the system for generating reliable trading signals.
Ethereum has become a popular blockchain with smart contracts for investors nowadays. Due to the decentralization and anonymity of Ethereum, Ponzi schemes have been easily deployed and caused significant losses to investors. However, there are still no explainable and effective methods to help investors easily identify Ponzi schemes and validate whether a smart contract is actually a Ponzi scheme. To fill the research gap, we propose PonziLens, a novel visualization approach to help investors achieve early identification of Ponzi schemes by investigating the operation codes of smart contracts. Specifically, we conduct symbolic execution of opcode and extract the control flow for investing and rewarding with critical opcode instructions. Then, an intuitive directed-graph based visualization is proposed to display the investing and rewarding flows and the crucial execution paths, enabling easy identification of Ponzi schemes on Ethereum. Two usage scenarios involving both Ponzi and non-Ponzi schemes demonstrate the effectiveness of PonziLens.
Yingjie Zhu, Jiageng Ma, Fangqing Gu, Jie Wang · 10 authors
Bitcoin is one of the most successful cryptocurrencies, and research on price predictions is receiving more attention. To predict Bitcoin price fluctuations better and more effectively, it is necessary to establish a more abundant index system and prediction model with a better prediction effect. In this study, a combined prediction model with twin support vector regression was used as the main model. Twenty-seven factors related to Bitcoin prices were collected. Some of the factors that have the greatest impact on Bitcoin prices were selected by using the XGBoost algorithm and random forest algorithm. The combined prediction model with support vector regression (SVR), least-squares support vector regression (LSSVR), and twin support vector regression (TWSVR) was used to predict the Bitcoin price. Since the model’s hyperparameters have a great impact on prediction accuracy and algorithm performance, we used the whale optimization algorithm (WOA) and particle swarm optimization algorithm (PSO) to optimize the hyperparameters of the model. The experimental results show that the combined model, XGBoost-WOA-TWSVR, has the best prediction effect, and the EVS score of this model is significantly better than that of the traditional statistical model. In addition, our study verifies that twin support vector regression has advantages in both prediction effect and computation speed.
Dzaki Mahadika Gunarto, Siti Saadah, Dody Qori Utama
Cryptocurrency price prediction is a crucial task for financial investors as it helps determine appropriate investment strategies and mitigate risk. In recent years, deep learning methods have shown promise in predicting time-series data, making them a viable approach for cryptocurrency price prediction. In this study, we compare the effectiveness of two deep learning techniques, the Recurrent Neural Network (RNN) and Long-Short Term Memory (LSTM), in predicting the prices of Bitcoin and Ethereum. Results of this research show that the LSTM method outperformed the RNN method, obtaining lower Root Mean Squared Error (RMSE) and Mean Absolute Percentage Error (MAPE) values for predicting both cryptocurrencies. Bitcoin and Ethereum. Specifically, the LSTM model had a RMSE of 0.061 and MAPE of 5.66% for predicting Bitcoin, and a RMSE of 0.036 and MAPE of 4.58% for predicting Ethereum. In this research, we found that the LSTM model is a more effective method for predicting cryptocurrency prices than the RNN model.
In recent years, the digital world is fast speeding developed from decentralised concept to blockchain, then to cryptocurrency. Especially, cryptocurrency is a popular trending in recent decades that attracts different experts from various field. Its high volatility has been attracted plenty of investors while also brings the difficulty for realizing the price forecasting. On this basis, this study uses public cryptocurrency dataset and three analytical models to predict the direction of cryptocurrency’s price. To be specific, three underlying assets covering large proportion in cryptocurrency are selected, i.e., Bitcoin, Ethereum and Dogecoin. According to the analysis, the prediction results of different models and approaches will be presented. At the end of study, it gains that the optional model with appropriate hyperparameters based on the judgement of metrics values, which offers relevant suggestions for future works. These results shed light on guiding further exploration of cryptocurrency price prediction in terms the state-of-art machine learning scenarios.
Since Bitcoin was proposed in 2008, it has become a very valuable asset and an important part of many investors’ portfolios. It’s important to both understand Bitcoin mechanics and predict its valuation with the help of the state-of-art machine learning tools. The study develops four different models, including Ordinary Least Squares (OLS) regression model, Random Forest, Light Gradient Boosting Machine (LightGBM), and Long Short-Term Memory (LSTM), to predict the return of Bitcoin and compare the performance of these models. According to the analysis, the daily changes in the high, low, close price of Bitcoin, and close price of Tesla stock, and gold price between yesterday and today are all strongly correlated to the Bitcoin return on tomorrow. The statistical approach, or OLS modeling, has the simplest algorithm whereas the highest accuracy rate. The LightGBM model and LSTM model have lower accuracy rates in order, but still exceed the 50% (random benchmark). The Random Forest model, as another type of decision tree algorithm, has similar prediction results with the LightGBM model but a lower accuracy rate that fails to reach the benchmark. Based on the analysis, multiple factors affect the Bitcoin return, and these results provide an insight for investors to the cryptocurrency market and the macroeconomic environment. It validates the effectiveness of several machine learning algorithms in Bitcoin return forecasting and supports future developments in related fields.
Price prediction of cryptocurrencies is bound to get more opportunities for investors engaged in digital currency-related industries in order to earn more revenue. In the traditional forecasting methods, the problem of the high volatility of bitcoin price needs to be effectively solved, making the forecasting accuracy become low and ineffective. Due to the rapid development of artificial intelligence technology, more and more relevant algorithms were used for cryptocurrency price research. This study would compare and analyze the prediction effect of the ARIMA time-series model, the Random Forest algorithm of machine learning, and the LSTM algorithm of deep learning algorithm on cryptocurrencies price prediction to assist investors in making investment decisions. In this paper, five years of time-series data of Bitcoin, Ether, and Dogecoin is obtained from 2018 to 2022. Then, the training set and testing set are separated with 0.8:0.2 to test ARIMA, Random Forest, and LSTM algorithms. To evaluate the model, the mean square error (MSE), root mean square error (RMSE), mean absolute error (MAE), and decidability coefficient (R2) are chosen as metrics to measure the prediction of each prediction model precision. Comparing the experimental results, the prediction accuracy of LSTM is better than that of Random Forest, and the prediction accuracy of Random Forest is better than ARIMA model. These results shed light on guiding further exploration of significant to cryptocurrency industry practitioners and visitors.
Currently, cryptocurrency has become a research and investment topic of great concern and attracted considerable attentions in a wide range of fields. Stocks are well known as a form of investment, and there are countless studies on how its price trends. Cryptocurrencies, however, are not easily predicted due to their extremely high volatility. This paper implements the forecasting results by taking three major cryptocurrencies (i.e., Bitcoin, Ethereum, Dogecoin) as examples for the period starting from January 1st, 2020 to May 31st 2022. Four popular prediction models (XGBoost, LightGBM, GARCH, ARIMA) are applied in Python by training models and testing the prediction results. According to the analysis, XGBoost and LightGBM can forecast the future prices for all three cryptocurrencies exactly apart from the turning points when prices rise and drop suddenly. Although the predicting trends of GARCH, ARIMA have differences from the real price, they can forecast well except the unexpected situations such as COVID-19. Overall, relatively reliable and accurate prediction models can be provided for investors to apply and make wise decisions in investments based on the results of this study.
Contemporarily, blockchains and cryptocurrencies have gained their popularity among investors and hedge funder, where both have bright prospects. On this basis, cryptocurrencies have been used in trading more and more with the development of website and computer. In this case, their prices fluctuations do have great significance to the public. This paper chooses three machine learning model (i.e., XGBoost, LightGBM and Linear Model) to predict the price of three cryptocurrencies (i.e., Bitcoin, Dogecoin and Ethereum). To be specific, this study uses the data from 2020-01-01 to 2022-12-07, including close price, open price, high price, low price, and the volume of trading coins. According to the analysis, Linear Model can predict the price best, with well-fitted trend prediction and accurate price prediction. In addition, other models can also have good predictions but they are not better than Linear model. These results can help others to predict the price of cryptocurrencies and have a deep understanding of cryptocurrency and machine learning.
Bitcoin is sometimes called the new gold, replacing gold as a hedge against inflation, and research on the relationship between bitcoin and gold has important practical implications. This paper first calculates the correlation between bitcoin and gold. By introducing the calculation of dynamic penalty coefficient, the double stock portfolio investment problem is transformed into the single stock purchase investment problem, which greatly reduces the difficulty of feature engineering and model application. In terms of decision model, deep reinforcement learning (PPO algorithm) is used to make quantitative investment decisions, and the expected data in SLTM is taken as the input data of deep reinforcement learning, which is combined with deep reinforcement learning. Compared with machine learning quantitative investment decisions, after a period of learning, the accuracy rate and returns have been substantially improved.
In recent years, Bitcoin has become the most widely used blockchain platform in business and finance. The goal of this work is to find a viable prediction model that incorporates and perhaps improves on a combina-tion of available models. Among the techniques utilized in this paper are exponential smoothing, ARIMA, artificial neural networks (ANNs) models, and prediction combination models. The study's most obvious discovery is that artificial intelligence models improve the results of compound prediction models. The sec-ond key discovery was that a strong combination forecasting model that responds to the multiple fluctua-tions that occur in the bitcoin time series and Error improvement should be used. Based on the results, the prediction accuracy criterion and matching curve-fitting in this work demonstrated that if the residuals of the revised model are white noise, the forecasts are unbiased. Future work investigating robust hybrid model forecasting using fuzzy neural networks would be very interesting.
Bitcoin, the largest cryptocurrency, is extremely volatile and hence needs a better model for its pricing. In the literature, many researchers have studied the effect of data normalization on regression analysis for stock price prediction. How has data normalization affected Bitcoin price prediction? To answer this question, this study analyzed the prediction accuracy of a Legendre polynomial-based neural network optimized by the mutated climb monkey algorithm using nine existing data normalization techniques. A new dual normalization technique was proposed to improve the efficiency of this model. The 10 normalization techniques were evaluated using 15 error metrics using a multi-criteria decision-making (MCDM) approach called technique for order performance by similarity to ideal solution (TOPSIS). The effect of the top three normalization techniques along with the min–max normalization was further studied for Chebyshev, Laguerre, and trigonometric polynomial-based neural networks in three different datasets. The prediction accuracy of the 16 models (each of the four polynomial-based neural networks with four different normalization techniques) was calculated using 15 error metrics. A 16 × 15 TOPSIS analysis was conducted to rank the models. The convergence plot and the ranking of the models indicated that data normalization plays a significant role in the prediction capability of a Bitcoin price predictor. This paper can significantly contribute to the research with a new normalization technique for utilization in varied fields of research. It can also contribute to international finance as a decision-making tool for different investors as well as stakeholders for Bitcoin pricing.
As cryptocurrencies develop, it cannot be denied that crypto prices are volatile. One of the influencing factors is the increasing volume of transactions which attracts the interest of researchers to conduct research in developing coin price predictions from cryptocurrencies. The method, algorithm and amount of data affect the prediction results. In this study, prediction modelling will be carried out using the LSTM method and short-term data. This study will conduct two experiments using the simple LSTM method and utilising multivariate time series with LSTM. The smallest predicted value is obtained using an 80/20 data allocation distribution scenario, input layer LSTM = 360, Epoch = 500, a Solana coin with RMSE = 0.111, R2 = 0.9962. It can be interpreted that short-term data can be used in making predictive models. Still, special attention needs to be paid to the characteristics of the dataset used and the modelling methodology, and it is hoped that the results of this study can be used in further research.
In this paper, we propose a novel approach for forecasting cryptocurrency portfolios, harnessing modified versions of the N-BEATS deep learning architecture, integrated with convolutional network layers, Transformer mechanisms, and the Mish activation function. Our thorough evaluation, featuring an extensive sample size exceeding 4 million portfolio test samples, shows these variations outperforming traditional and other deep learning forecasting methods across various metrics. Particularly noteworthy is our N-BEATS Perceiver model, a Transformer-based variation, which not only delivers superior forecast accuracy but also exhibits a robust risk profile with less downside. Furthermore, the model performs exceptionally well under the TOPSIS method across a broad spectrum of portfolio evaluation parameters, making it a valuable asset for both portfolio selection and risk management in the dynamic cryptocurrency market.
L. Thanga Mariappan, J. Arun Pandian, V. Dhilip Kumar, Oana Geman · 6 authors
Cryptocurrency has emerged as a well-known significant component with both economic and financial potential in recent years. Unfortunately, Bitcoin acquisition is not simple, due to uneven business and significant rate fluctuations. Traditional approaches to price forecasting have proven incapable of proving adequate data and solutions because prices can now be forecast in real time. We recommended a machine learning-based alternative for a mortgage lender based on highlighted problems in forecasting the price of Bitcoin. The proposed system included a reinforcement learning algorithm for price estimation and forecasting, as well as a blockchain framework for an efficient and secure environment. The proposed prediction, compared to other state-of-the-art strategies in this sector, demonstrated better performance. In this system, the proposed prediction reached improved consistency, in comparison to other systems, with respect to Monero (XMR), Litecoin (LTC), Oryen (ORY), and Bitcoin (BTC).
The cryptocurrency ecosystem has been the centre of discussion on many social media platforms, following its noted volatility and varied opinions. Twitter is rapidly being utilised as a news source and a medium for bitcoin discussion. Our algorithm seeks to use historical prices and sentiment of tweets to forecast the price of Bitcoin. In this study, we develop an end-to-end model that can forecast the sentiment of a set of tweets (using a Bidirectional Encoder Representations from Transformers - based Neural Network Model) and forecast the price of Bitcoin (using Gated Recurrent Unit) using the predicted sentiment and other metrics like historical cryptocurrency price data, tweet volume, a user's following, and whether or not a user is verified. The sentiment prediction gave a Mean Absolute Percentage Error of 9.45%, an average of real-time data, and test data. The mean absolute percent error for the price prediction was 3.6%.
Phumudzo Lloyd Seabe, Claude Rodrigue Bambe Moutsinga, Edson Pindza
Highly accurate cryptocurrency price predictions are of paramount interest to investors and researchers. However, owing to the nonlinearity of the cryptocurrency market, it is difficult to assess the distinct nature of time-series data, resulting in challenges in generating appropriate price predictions. Numerous studies have been conducted on cryptocurrency price prediction using different Deep Learning (DL) based algorithms. This study proposes three types of Recurrent Neural Networks (RNNs): namely, Long Short-Term Memory (LSTM), Gated Recurrent Unit (GRU), and Bi-Directional LSTM (Bi-LSTM) for exchange rate predictions of three major cryptocurrencies in the world, as measured by their market capitalization—Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC). The experimental results on the three major cryptocurrencies using both Root Mean Squared Error (RMSE) and the Mean Absolute Percentage Error (MAPE) show that the Bi-LSTM performed better in prediction than LSTM and GRU. Therefore, it can be considered the best algorithm. Bi-LSTM presented the most accurate prediction compared to GRU and LSTM, with MAPE values of 0.036, 0.041, and 0.124 for BTC, LTC, and ETH, respectively. The paper suggests that the prediction models presented in it are accurate in predicting cryptocurrency prices and can be beneficial for investors and traders. Additionally, future research should focus on exploring other factors that may influence cryptocurrency prices, such as social media and trading volumes.
The crypto and digital assets ecosystems have attracted investment, regulators, and speculators to their environment. As the blockchain-based framework can reduce transaction costs, generate distributed trust, and enable decentralized platforms, it has become a potential new base for decentralized business models. Previous studies have highlighted the advantages and drawbacks of each platform, such as interest rates, cost concerns, transparency issues, hacking issues, and hazards. Consequently, it is challenging for investors to evaluate the cryptocurrency trading system which determines the optimum exchanges and crucial aspects. Therefore, in order to rank the optimal digital token trading system, this paper develops an evaluation architecture to determine the various token trading systems. The developed architecture integrates fuzzy theory and the best-worst method (BWM) into the decision-making process to assess decision behaviors regarding preference for digital token trading systems in investors in Taiwan. First, this work establishes the views and parameters by modifying the Delphi method based on a literature review and survey. Second, the fuzzy-BWM is applied to obtain the fuzzy weights of the views and parameters. Then, defuzzification and BWM are used to rank the optimal alternatives of the digital token trading systems for investors. The results indicate that the optimal digital token trading system is the decentralized platform, and the critical parameters are gas fees, interest rates, and the mechanism of savings under fuzzy uncertain scenarios. This means that when considering the uncertain and ambiguous characteristics of the expert decision process in digital token trading systems, the evaluation is decentralized and the gas fees are the most important parameter in the digital token investment platform. Academically, the fuzzy BWM-based decision-making architecture can provide corporations and investors with valuable guidance to rank the optimal digital token trading systems based on fuzzy uncertain scenarios. Commercially, the proposed architecture could provide corporations and investors with a useful model to measure the optimal digital token trading system.
Twitter sentiment has been found to be useful in predicting whether the price of Bitcoin will rise or fall will climb or decline. Modelling market activity and hence emotion in the Bitcoin ecosystem gives insight into Bitcoin price forecasts. We take into account not just the emotion retrieved not just from tweets, but also from the quantity of tweets. With the goal of optimising time window within which expressed emotion becomes a credible predictor of price change, we provide data from research that examined the link among both sentiment and future price at various temporal granularities. We demonstrate in this study that not only can price direction be anticipated, but also the magnitude of price movement with same accuracy, and this is the study's major scientific contribution. Non-Fungible Token (NFT) has gained international interest in recent years as a blockchain-based application. The most prevalent kind of NFT that can be stored on many blockchains is digital art. We did studies on CryptoPunks, the most popular collection on the NFT market, in examine and depict each and every major ethical challenges. We investigated ethical concerns from three perspectives: design, trade transactions, and relevant Twitter topics. Using Python libraries, a Twitter crawler, and sentiment analysis tools, we scraped data from Twitter and performed the analysis and prediction on bitcoin and NFTs.
Cryptocurrencies are a digital way of money in which all transactions are held electronically. It is a soft currency which doesn’t exist in the form of hard notes physically. Here, we are emphasizing the difference of fiat currency which is decentralized that without any third-party intervention all virtual currency users can get the services. However, getting services of these cryptocurrencies impacts on international relations and trade, due to its high price volatility. There are several virtual currencies such as bit-coin, ripple, ethereum, ethereum classic, lite coin, etc. In our study, we especially focused on a popular cryptocurrency, i.e., bitcoin. From many types of virtual currencies, bitcoin has a great acceptance by different bodies such as investors, researchers, traders, and policy-makers. To the best of our knowledge, our target is to implement the efficient deep learning-based prediction models. Specifically long short-term memory (LSTM) and gated recurrent unit (GRU) to handle the price volatility of bitcoin and to obtain high accuracy. Our study involves comparing these two time series deep learning techniques and proved the efficacy in forecasting the price of bitcoin.
Non-Fungible Tokens (NFTs) represent deeds of ownership, based on blockchain technologies and smart contracts, of unique crypto assets on digital art forms (e.g., artworks or collectibles). In the spotlight after skyrocketing in 2021, NFTs have attracted the attention of crypto enthusiasts and investors intent on placing promising investments in this profitable market. However, the NFT financial performance prediction has not been widely explored to date. In this work, we address the above problem based on the hypothesis that NFT images and their textual descriptions are essential proxies to predict the NFT selling prices. To this purpose, we propose MERLIN, a novel multimodal deep learning framework designed to train Transformer-based language and visual models, along with graph neural network models, on collections of NFTs' images and texts. A key aspect in MERLIN is its independence on financial features, as it exploits only the primary data a user interested in NFT trading would like to deal with, i.e., NFT images and textual descriptions. By learning dense representations of such data, a price-category classification task is performed by MERLIN models, which can also be tuned according to user preferences in the inference phase to mimic different risk-return investment profiles. Experimental evaluation on a publicly available dataset has shown that MERLIN models achieve significant performances according to several financial assessment criteria, fostering profitable investments, and also beating baseline machine-learning classifiers based on financial features.