Price Prediction for Cryptos: AI Predictions

Alejandro Betancourt
Robot representing AIPhoto by Possessed Photography on Unsplash

Cryptocurrencies are a relatively new concept and technology that many people have not taken seriously. I was one of those people, not anymore. I bought my first crypto in May. But now cryptocurrencies seem to be popping up everywhere. As I write this article, the king of crypto is almost back at its ATH.

One aspect of cryptocurrencies that is interesting to me is price prediction. Many people rely on this to make an investment decision, which makes sense for some aspects of cryptocurrencies, but the fact that we can’t predict what will happen in the future puts this practice into perspective.

Cryptocurrency and blockchain technology is emerging and evolving in many different ways. Specific algorithms try to predict the trend of the currency by analyzing the coin’s history, its velocity, or its uses. Some strategies are developed with neural networks or reinforcement learning. But some algorithms only use historical data to predict coins’ future values without considering any other factors. Artificial intelligence can analyze more factors that influence cryptocurrency prices, but there are limitations to AI.

What is Price Prediction?

In any market, traders need to be aware of the current trends and fluctuations to decide how to trade. In a volatile market, predictions can be just as valuable as an actual trade if executed correctly.

Price prediction is the idea that cryptos have a future value, and the higher this perceived value, the more people will invest in cryptocurrencies. The demand for cryptocurrencies has been increasing exponentially as their prices rise. There are many different strategies used to predict cryptocurrency prices depending on who is using them. For example, some AI bots predict currency prices; however, they cannot make accurate predictions about an unknown currency given no precedent data exists yet.

Some algorithms try to predict trends of currencies by analyzing past coin behaviors like velocity or uses. Still, not all can accurately do so because not every algorithm considers other factors such as new algorithm releases or recent news stories that may impact price changes rapidly without warning. Artificial Intelligence is a relatively new concept that is difficult to grasp even for those who work with it daily.

Real benefit or purpose.

In the end, cryptocurrencies are too volatile and unpredictable for anyone to accurately predict prices from week to week or month to a month, given there are no precedent data or dominant market behavior patterns people can use as a baseline comparison. The best we have right now is outdated information based on past cryptocurrency behaviors, which make predictions fluctuate up and down depending on what currency you’re speaking about at any one time. Many factors affect cryptocurrencies, such as technological development, market manipulation, regulation changes, and economic cycles. The price prediction takes into account all these other factors to get a more accurate estimate.

Although cryptos are complicated to predict their prices, I still think it’s interesting because it makes people think about what cryptocurrencies can do for them. It is also a way for me to take an interest in the topic even if I know that price prediction has no real benefit or purpose other than being optimistic or pessimistic, depending on your point of view.

Digital currencies are being used more and more to make online payments, thanks to their low transaction fees, fast confirmation times, and security. Bitcoin is the most popular digital currency, with a market share exceeding 50%. But will this trend continue in the future? I’m not sure cryptocurrencies will continue to dominate the future of payments, but I think they are here to stay.

Predicting the future.

Cryptocurrencies were created for a specific reason and function — online transactions. Over time, they have become more popular because many people see their benefits compared to fiat currencies like dollars or euros. But cryptocurrencies also come with downsides such as price volatility, security concerns, lack of regulation, etc. If cryptocurrencies want to be widely used in the future, these factors need to be addressed before happening on any significant scale.

So how does one predict whether cryptocurrencies will remain at the top? The answer is simple — you cannot! There is no way anybody can tell what may happen in the next few months, let alone years from now. We can’t predict the future!

It is not possible to predict cryptocurrencies with any degree of certainty. Partially because cryptocurrencies are still at a very early stage, the technology needs some maturing before expecting mass adoption on a larger scale. And another reason that it’s hard to give cryptocurrencies price predictions is — nobody knows what will happen! It could be unexpected, such as government regulations, unforeseen hacks, or even sudden changes in public opinion due to some bad news event (e.g., cryptocurrency scammers). The list goes on and on; there is no way anybody can foresee all potential future events, let alone their effects when combined over time!

The cryptocurrency market has attracted many new investors, but some are still hesitant to invest. Unlike traditional markets, there is no central governing body; this leads some to believe that the cryptocurrency market is more hype than substance. So, how are predictions made in this field?

Predictions in the crypto field are somewhat subjective and speculative because there is no way to assess the fundamental value based on fundamental analysis. However, some experts have noted that “speculative” is not always a bad thing because it means they are not privy to insider information or knowledge about the market, which would give them an advantage over other investors. There has been speculation about increased regulation on cryptocurrencies which may change this dynamic of speculative markets, with insider information being less of an advantage for those who know more about rules.

Predictions are hard to get right because they require one to foresee the future. It is not easy to determine the right way in which a specific situation will turn out. Similarly, it is tough to develop a prediction that will be accurate and correct 100% of the time. Even if somebody makes a prediction that turns out to be accurate, it doesn’t mean that they will always be accurate in their predictions.

It would seem like a good idea for people who make predictions not to make any predictions, but this would mean that they would have no idea what’s going on in the world and what’s happening currently. I think that someone good at predicting is someone good at reading patterns.

One of the significant reasons crypto predictions are difficult to make is that there are numerous unknowns in this space. For instance, it is unclear when cryptocurrencies will become mainstream or what will happen in the future.

Another reason why crypto predictions are hard to make is that this market has a lot of volatility. For example, cryptocurrency prices can drop significantly in a short period; This makes it hard for analysts to predict how prices will go in the future accurately.

One of the advantages cryptocurrencies have is that they can be used to store and transfer value. However, cryptocurrencies cannot replace fiat currencies yet because there are still problems like scalability and transaction fees.
Different silver and golden coins representing cryptocurrencies.Photo by Roger Brown from Pexels

Many people believe cryptos will take over fiat currencies, but this could not happen anytime soon since cryptocurrencies have not solved many vital issues such as lack of trust or speed. It would make sense for large banks worldwide to deploy their blockchain technology, so customers feel comfortable using their services daily. As more companies implement cryptocurrency technologies into their systems, users will see its current value, which should help push up prices. Also, if governments choose to regulate cryptocurrencies, they will most likely do so positively. If so, cryptocurrencies could see further growth as more people adopt them over fiat currencies, making them even more potent and pushing prices up even higher. In short, cryptocurrencies are here to stay, but the question is how long it takes for this technology to become mainstream? I believe we can expect cryptocurrencies to be increasing their worth for the time being.

DISCLAIMER: I am not a financial advisor. This post is for entertainment purposes only. I am not recommending financial products, always do your research and make your own decisions about what is best for you.

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Los Angeles, CA

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