Great breakdown by Sminston.
Rudd and Porter’s paper on Bitcoin price forecasting makes zero logical sense.
Something very interesting about Rudd and Porter's peer-reviewed paper on Bitcoin's price forecast: they don't show their price models superimposed on Bitcoin's price history.
Here is exactly that - and probably why they didn't want to show it in the paper. 👇
Orange = median PL regression model
Orange band = 5th-95th percentile PL regression
Green, grey, red, blue = Rudd/Porter's Fig. 11 models
- - -
On its face, visually and qualitatively, it looks improbable at best. Quantitatively and intuitively, it falls far outside the bounds of the value growth expected of Bitcoin as a network with specific scaling properties.
Select quote from the paper:
"Power law models that statistically describe Bitcoin’s historical price growth [...] are descriptive, not predictive, in that they provide no insights regarding the direct impact of particular determinants on market price."
Meanwhile, this paper has predicted NOTHING, and I and others have shown out-of-sample PREDICTIONS of Bitcoin's price using the power law as far back as early 2016/late 2015.
Stay tuned for my own comprehensive peer-review of this work.
-Smitty
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