I am attempting to utilize a Wiener process through a random walk in order to estimate the price of Bitcoin for the next 5 years. The Wiener process formula involves a drifting coefficient, mu, and a random variable, sigma, to determine the change in price, denoted as delta of price. To calculate the trend coefficient, alpha, I analyzed the historical prices of Bitcoin by measuring the percentage change between the lowest price in 2017 (around 9xx) and the lowest price in 2023 (around 15k), as well as the highest price in 2017 (around 16k) and the highest price in 2022 (around 68k). I then divided the differences by 5 years and calculated the average, resulting in an increase rate of approximately 149% per year. Based on this simulation, the highest price that Bitcoin could reach in the next 5 years varies from 2-3.5 million dollars. Additionally, according to the simulation, it is likely that we will reach a new ATH within this year or next year.
I do this for fun , pls take decision with your own risk.
I do this for fun , pls take decision with your own risk.
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I made some mistake, the drift coefficient should be 1.04 not 1.4, probably 200k-500k next 5 years .sorry