Anticipating Cryptocurrency Prices Using Machine Learning – Good or Bad?

Machine learning has come a long way, and now it’s being put to use in forecasting the price of Bitcoin and other cryptocurrencies, but is it really efficient?
The article below agrees that A.I. can accurately predict future prices…

Machine learning and AI-assisted trading have attracted growing interest for the past few years. Here, we use this approach to test the hypothesis that the inefficiency of the cryptocurrency market can be exploited to generate abnormal profits. We analyse daily data for cryptocurrencies for the period between Nov. 2015 and Apr. 2018. We show that simple trading strategies assisted by state-of-the-art machine learning algorithms outperform standard benchmarks. Our results show that nontrivial…

Source: Anticipating Cryptocurrency Prices Using Machine Learning

However, opinions are divided, and some people say:
“When something looks too good to be true, it usually is.” — Emmy Rossum

In the following, I want to demonstrate why this is the case.

Don’t get me wrong — my intention is not to undermine the work put into those articles. They are good and deserve the claps they received. In fact, many of those approaches are very accurate — technically speaking.

The goal of this article is to bring out why those models are, in practice, fallacious and why their predictions are not necessarily suitable for usage in actual trading.

Source: Don’t be fooled — Deceptive Cryptocurrency Price Predictions Using Deep Learning