Close this search box.
Close this search box.

Cryptocurrency Predictions 2021 : Can Machine Learning Predict the Future of Cryptocurrency?

Cryptocurrency Predictions 2021 : Can Machine Learning Predict the Future of Cryptocurrency?

Cryptocurrency Predictions 2021 : Cryptocurrency markets are far better understood now than they were a few years ago.

Nevertheless, they still represent a new asset class for investors, and it’s fair to say that we’re still trying to figure them out. Part of the process of doing so now involves exploring whether or not machine learning might help predict crypto movements.

How Cryptocurrency is Changing Zimbabwe

In some respects, we have actually seen machine learning put to use in the crypto sector — specifically with regard to security and fairness. Our article on how AI enforces the crypto market covered this idea, and revealed that AI is being “employed to detect trading irregularities” within the market.

The article noted that the Ronan AI program detected trading irregularities by analyzing data around the time when a Goldman Sachs announcement sparked a 10% decrease in heavily traded cryptos.

While similar programs may not be policing the crypto market specifically, they are keeping an eye out for problematic patterns. But what many are more curious about is whether or not machine learning can also be predictive, such that it could provide an edge to crypto traders by spotting patterns in advance.

The reason that this has become a popular question, beyond the fact that crypto markets are still new, is that cryptos are extraordinarily volatile. A high-value cryptocurrency such as bitcoin can easily drop $2,000 in two days.

But at the same time, a report showed a 16% jump in bitcoin’s value in 24 hours just last month (with cryptos overall rising $23.8 billion over the same period of time). These wild swings make many traders nervous, and naturally make the idea of AI-driven predictions appealing.

Ai Enforces the Crypto Market

The aforementioned appeal has also been compounded in recent years by the emergence of ways to trade crypto movement, rather than price. Crypto CFDs are intriguing alternatives to ordinary trading.

CFDs are essentially contracts in which a trader attempts to forecast whether a given cryptocurrency will gain or lose value in relation to another currency (either fiat or crypto).

It’s still tricky, but in a way it’s less precise than price trading. In theory, if machine learning can predict even general trends in a market, something like CFD trading could become very appealing.But can machine learning actually do the job? So far, there have been mixed results.

In an article written for Hacker Noon, Jesus Rodriguez wrote about price prediction in the crypto market and summed up both the potential and limitations for AI in this space.

The article first mentioned time series forecasting methods (such as ARIMA, DeepAR+, and Facebook’s Prophet), which it called “easy to implement but not very resilient.” Basically, the market variations in cryptocurrency overwhelmed these methods.

Next, the article covered traditional machine learning methods (such as linear regression and decision trees), which, when put into action, had a hard time generalizing knowledge.

Looking Below the Surface of the Ripple Labs & Moneygram Partnership

While there’s a great deal of data at hand to support these methods, cryptos behave too unusually for that data to be compiled in a way that is necessarily meaningful — at least at this stage.

The analysis found that deep learning models had the most potential, as they achieved “decent levels of performance” regarding predictions. This idea, though, is still being explored. Perhaps the most prominent public example of the concept in action was written up by Towards Data Science.

The analysis there discussed in great detail the use of LSTM neural networks to facilitate a model predicting bitcoin prices in real time — a complicated and imperfect idea, but certainly an intriguing one.

Ultimately, right now, we can’t say definitively that machine learning can reliably predict cryptocurrency prices. Though as some of these examples indicate, different methods are being explored, and some have had degrees of success.

It may not be long before reasonably predictive analysis is more accessible, and traders can take advantage of better data.

My Experience With Coronavirus

Why did Coronavirus Spread so Fast?

Coronavirus and Globalization Moving Forward

Disinfecting Surfaces Against Coronavirus

Contagion Risks from Coronavirus

Coronavirus Oxygen Supplementation 101

Coronavirus: The Global Economic Impact

Home Care for Coronavirus

Coronavirus Causes Long Term Problems?

Online Coronavirus Scams Proliferate

What Is The True Coronavirus Case Fatality Rate For Young People?

How Likely Are Young People to be Hospitalized With Coronavirus?

Living On The Edge of A New Society

Coronavirus Will Test the Limits of Our Hospitals

Coronavirus Catapults Global Testing Innovation

Spain Suffers Under Coronavirus

Data, Models & Misinformation on the Coronavirus

Origins of the Coronavirus

Coronavirus Travels the Silk Road

Coronavirus Attacks Italy’s Sick and Elderly

Is the New Coronavirus Drug a Cure?

What is the Mystery of Germany’s Low Coronavirus Fatality Rate?

Coronavirus & the Economy

The World Will Be More Technologically Advanced After the COVID-19 Pandemic

Why has the Coronavirus Not Exploded in Japan?

Italy’s Coronavirus Death Rate is Falling

Conquering The Coronavirus

Coronavirus Speeds Up Robotic Revolution

Economic Depression Will Destroy More Lives Than Coronavirus

Can Hydroxychloroquine be Used to Treat Coronavirus?

Northern Italy & Wuhan: Partners for Better or Worse

The Race for the Coronavirus Cure

How Did Taiwan Manage the Coronavirus so Well?

What is the US Coronavirus Fatality Rate?

Travel Ban Saves Airlines Billions

Coronavirus Superspreader?

Deep Learning Detects Coronavirus

Singapore’s Coronavirus Patients Have a 0% Mortality Rate So Far… Why?

AI is Mapping the Coronavirus and Inferring its Possible Economic Impact

Coronavirus: Fact from Fiction

Death From Covid-19 is Not From the Coronavirus:

An Interview With NYU Langone Health Professor & Rheumatologist Dr. Gary Solomon

Coronavirus Attacks Italy’s Sick and Elderly

Interview with NASA Astronaut Scott Kelly: An American Hero​

13 Questions With General David Petraeus

Why Choose Machine Learning Investing Over A Traditional Financial Advisor?

Interview With Home Depot Co-Founder Ken Langone

Interview with the Inventor of Amazon’s Alexa

Automation and the Rebirth of American Retail

China Debuts Stealth Unmanned Combat Aerial Vehicle

Sweden’s Economy Embraces AI & Automation

Austria’s Automated Ai & Robotic Future Is Now

Nuclear Submarines: A 7,000 Lb Swiss Watch

Ai Can Write Its Own Computer Program

On Black Holes: Gateway to Another Dimension, or Ghosts of Stars’ Pasts?

Egypt’s Artificial Intelligence Future

Supersonic Travel: The Future of Aviation

Was Our Moon Once Habitable?

The Modern Global Arms Race

NASA Seeks New Worlds

Cowboy Turned Space Surgeon

Shedding Light on Dark Matter: Using Machine Learning to Unravel Physics’ Hardest Questions

When High-Tech Meets Low-Tech Economy: Ai & the Construction Industry

Aquaponics: How Advanced Technology Grows Vegetables In The Desert

The World Cup Does Not Have a Lasting Positive Impact on Hosting Countries

Artificial Intelligence is Transforming the Forex Market

Do Machines Dream? Inside the Dreams of a Machine

Can Ai Replace Human Ski Coaches?

America’s Next Spy Plane

Faster than Sound and Undetectable by Radar

The Implications of Machine Learning on Condensed Matter Physics & Quantum Computing

Crafting Eco-Sustainability: WTC and Environmental Sustainability

Can Ai Transform Swimming?

Argentina’s AI Future: Reversing a Century of Decline

Tennis & Artificial Intelligence

Kazakhstan’s Ai Aspirations

Peru’s Ai Future Will Drive Economic Growth

The Colombian Approach to the AI Revolution

How AI Can Explain Its Thinking

Singapore: Ai & Robotic City

Ai in New Zealand

Brazil & Artificial Intelligence​

Denmark & Ai

Can Ai Replace Human Ski Coaches?

Tennis & Artificial Intelligence

Written by Barbara Rhodes & Edited by Michael Ding & Alexander Fleiss

Cryptocurrency Predictions 2021