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    Ethereum Price Prediction: The Value Investor's Guide
    Ethereum Price Prediction: The Value Investor's Guide
    Ethereum Price Prediction: The Value Investor's Guide
    Ebook112 pages43 minutes

    Ethereum Price Prediction: The Value Investor's Guide

    By Percy Venegas

    ()

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    About this ebook

    Can the price direction of Ethereum be predicted for periods of days, using non-financial measurements of demand, to facilitate hedging against emerging financial risks?






    On July 25th 2017 the SEC published guidance indicating that US securities laws may apply to token sales, effectively recognizing crypto coins associated with entities such as the DAO as a new asset class. In Mutual Distributed Ledgers, or Blockchains, trust is embedded and no explicit chain of trust is necessary. Smart contracts running on a Blockchain allow to create objects with various degrees of liquidity and to automate the operations of a fund, enabling trustless crypto markets. 






    However unpredictable the price of financial instruments (including cryptocurrencies) might be, what lies at the heart of the issue is a matter of demand-side economics: the coders who contribute to the public project, the ones who develop decentralised applications on the Ethereum blockchain, and those who peruse knowledge of the development community for private projects, all are suppliers of technology –but consumers of Ethereum related-content. Likewise, the miners who validate transactions are suppliers to the ecosystem (they create Ether, the fuel of the Ethereum blockchain), but consume information about mining pools, mining calculators, and the like. Finally, end-users signal demand by using wallets, exchanges, and retailers that accept ETH as a payment method. Investors looking for Ethereum price predictions in 2017, 2018, 2020 or 2030 will therefore benefit from approaching the subject with a demand economics mindset. This approach is not confined to managers: counsels and other trusted advisors can benefit from the insights provided by simple models based on mainstream economic concepts (with no need for a trained data scientist). Finally, the possibility of predicting a seemingly unpredictable thing -the price of a crypto security- within knowable error margins and defined time frames, not only offers opportunities for value, but provides an useful risk management tool.     






    Contents:






    *Ethereum Price Prediction: What matters in the long term? 






    *Expanding the Ethereum price model






    -Ethereum wallet online






    -Ethereum wallet download 






    -Ethereum mining






    -Ethereum mining rig






    -Ethereum classic






    -Ethereum Dapp






    -Ethereum investing






    -Ethereum ICO funders selloffs






    -Ethereum whales






    -Ethereum trading






    -Ethereum CFD






    -Ethereum news






    -Ethereum going down 






    -Ethereum coin






    -What is Ethereum coin?






    -Bitcoin’s scaling deadlock






    -Ethereum tokens






    -Ethereum Name Service 






    -Ethereum risk






    Resources 






    -Ethereum wallets (Russian, Italian, Arabic, French, Spanish, Dutch). Hardware

    LanguageEnglish
    PublisherEconomyMonitor.com
    Release dateJul 10, 1905
    ISBN9781537858449
    Ethereum Price Prediction: The Value Investor's Guide

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      Book preview

      Ethereum Price Prediction - Percy Venegas

      ETHEREUM PRICE PREDICTION

      The Value Investor’s Guide

      Percy Venegas

      ECONOMY MONITOR

      Thank you for reading. If you enjoy this book, please leave a review or connect with the author.

      All rights reserved. Aside from brief quotations for media coverage and reviews, no part of this book may be reproduced or distributed in any form without the author’s permission. Thank you for supporting authors and a diverse, creative culture by purchasing this book and complying with copyright laws.

      Copyright © 2017 by Percy Venegas

      Published by ECONOMY MONITOR

      Interior design by Pronoun

      ISBN: 9781537858449

      TABLE OF CONTENTS

      Ethereum Price Prediction: What matters in the long term? : Introduction

      Problem statement

      Exploratory analysis

      Model

      Expanding the Ethereum price model: Ethereum wallet online

      Ethereum wallet download

      Ethereum mining

      Ethereum mining rig

      Ethereum classic

      Ethereum Dapp

      Ethereum investing

      Ethereum ICO funders selloffs

      Ethereum whales

      Ethereum trading: Ethereum CFD

      Ethereum CFD

      Ethereum news

      Ethereum going down

      Ethereum coin

      What is a ethereum coin?

      Bitcoin’s scaling deadlock

      Ethereum tokens

      Soft factors

      Ethereum risk

      Implementation of Price Analytics at Scale

      Conclusions

      Resources

      References

      Appendix: Initial Coin Offering (ICOs) in Blockchain Trustless crypto-markets

      Appendix to the paper: a brief history of The DAO

      About the author

      Disclaimer

      More by Percy Venegas

      ETHEREUM PRICE PREDICTION: WHAT MATTERS IN THE LONG TERM?

      INTRODUCTION

      AS OF JUNE 17TH 2017 Ethereum had the largest market cap ($35,199,137,095) of all cryptocurrencies, second only to Bitcoin ($43,280,307,102). But unlike BTC, ETH not only works as a currency (e.g. a medium of exchange or store of value), the Ethereum blockchain is inherently programmatic: you can run smart contracts that have asset-like properties and execute all sorts operations, including the full automation of a fund, a supply chain, or an organization.

      ETH Price. Source: Etherscan.io

      The largest financial and industrial companies in the world are investing in Ethereum-based technology, including J.P Morgan, Toyota, Merck, and many others. However, a series of lingering concerns about risk exposures and stability of the whole system remain: the core of the project is open source, incomplete smart contracts are prone to abuse, and the market is still unregulated, which limits any control that could be exerted over speculation-induced volatility. A crash or other unexpected events could hamper adoption, or at the very least destroy value: as it happened in mid-2016 when an attack on The DAO, the largest crowdsale to that point in history, left investors with millions in losses ($55M from The DAO fund, and half-billion dollars in market value erased from Ethereum).

      However unpredictable the price of financial instruments (including cryptocurrencies) might be, what lies at the heart of the issue is a matter of demand-side economics: the coders who contribute to the public project, the ones who develop decentralised applications on the Ethereum blockchain, and those who peruse knowledge of the development community for private projects, all are suppliers of technology –but consumers of Ethereum related-content. Likewise, the miners who validate transactions are suppliers to the ecosystem (they create Ether, the fuel of the Ethereum blockchain), but consume information about mining pools, mining calculators, and the like. Finally, end-users signal demand by using wallets, exchanges, and retailers that accept ETH as a payment method. Investors looking for Ethereum price predictions in 2017, 2018, 2020 or 2030 will therefore benefit from approaching the subject with a demand economics mindset.

      PROBLEM STATEMENT

      Can the price direction of Ethereum be predicted for periods of days, using non-financial measurements of demand, to facilitate hedging against emerging financial risks?

      EXPLORATORY ANALYSIS

      We analyze daily usage data for 69 services and groups in the Ethereum ecosystem, for the period from December 2015 to May 2017. From the time series data on our selected measure of demand we can make interesting observations, including the initial role of faucets to seed the economy, how activity in The DAO community and development groups related to The DAO was correlated with price drops, and the apparent effect that the addition of mining capacity has on pumping up the price.

      Estimated demand of Ethereum related services

      MODEL

      We use machine learning to search in a space of millions of possible solutions. For a start, we prefer equations with a combination of fitness and interpretability; for instance, when choosing

      ETH_price = 0.00053560429554645*sma(wallet_1, 12)

      over

      ETH_price = 3.91902029107539 + 0.000130115228409987*rankings_1

      for some added complexity in the form/size of the equation, the error is reduced sharply. Furthermore, the chosen model provides deeper insight into the mechanics of the system: price can be better approximated using a Simple Moving Average (SMA) and demand for Ethereum wallets, rather than usage of cryptocurrency rankings portals.

      Model:ETH_price = a*sma(wallet_1, 12)

      This is

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