Utilizing The Price Estimator
This video shows how to leverage our bitcoin pricing dashboard. While the dashboard looks extremely simple, in back-testing – a method to see how well it could have predicted prices in the past – it was about 96% accurate. As shown in the table below, the back-testing results are very similar to the actual figures.
Trefis
The 96% accuracy figure was especially interesting, so we took a deeper dive. What does Bitcoin pricing depend on? Like the price for anything, it depends on two things: demand and supply, i.e. how many people want it vs. what is available. Demand for Bitcoin is primarily driven by two factors: the number of active users, and how much they transact. On the supply side, the number of available Bitcoins is capped, and about 80% of the capped number is already mined. As such, it is sensible to focus on the demand, both in terms of users and transaction volumes.
Create Your Own Estimate
If a user believes that our transaction volume forecast is too high – for example, if you think that the April volume forecast should be about 1 billion, you can click on the April forecast and enter 1 billion. In this scenario, the Bitcoin predicted price drops to about $8,000 for April. This is fine, but in this case the $16,000 estimate by the end of the year looks high.
View Source to Continue Reading: How To Estimate Bitcoin's Fundamental Value
