As a ponzi scheme built on hype, http://www.google.com/trends/explore#q=bitcoin is all you need.
Correlate Bitcoin prices with anything
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Re: Correlate Bitcoin prices with anything
#22Very interesting. Let's not forget that butter production in Bangladesh and U.S. cheese production, and sheep population in Bangladesh correlates hightly (99%) with the movements of the S&P 500.
http://nerdsonwallstreet.typepad.com/my_weblog/2007/04/stupi...
Re: Correlate Bitcoin prices with anything
#23As a ponzi scheme built on hype, http://www.google.com/trends/explore#q=bitcoin is all you need.
"Ponzi scheme" has a very specific definition (early investors paid by late investors rather than from profit). While Bitcoin may certainly be in a bubble, a sharp rise in price does not qualify it as a ponzi any more than tulip bulbs or AAPL shares.
Re: Correlate Bitcoin prices with anything
#24As a ponzi scheme built on hype, http://www.google.com/trends/explore#q=bitcoin is all you need.
"Ponzi scheme" has a very specific definition (early investors paid by late investors rather than from profit). While Bitcoin may certainly be in a bubble, a sharp rise in price does not qualify it as a ponzi any more than tulip bulbs or AAPL shares.
Let's call it a bubble then, since BTC's intrinsic value is somewhere near zero.
Re: Correlate Bitcoin prices with anything
#25Earlier quoted context omitted.
"Ponzi scheme" has a very specific definition (early investors paid by late investors rather than from profit). While Bitcoin may certainly be in a bubble, a sharp rise in price does not qualify it as a ponzi any more than tulip bulbs or AAPL shares.
Let's call it a bubble then, since BTC's intrinsic value is somewhere near zero.
The intrinsic value of USD is near zero. Useful in a post-apocalyptic as fire kindling, and not much else. Its perceived value is powered through the USA's massive military, political, economic, and financial power. Perhaps Bitcoin has a perceived value as a mechanism of subversion of such a hegemony.
Or maybe it's just a vehicle of speculation. Either way, no modern currency has intrinsic value.
Re: Correlate Bitcoin prices with anything
#26Earlier quoted context omitted.
Let's call it a bubble then, since BTC's intrinsic value is somewhere near zero.
The intrinsic value of USD is near zero. Useful in a post-apocalyptic as fire kindling, and not much else. Its perceived value is powered through the USA's massive military, political, economic, and financial power. Perhaps Bitcoin has a perceived value as a mechanism of subversion of such a hegemony. Or maybe it's just a vehicle of speculation. Either way, no modern currency has intrinsic value.
That's why Australia has polymer banknotes, in a post apocalyptic situation you can combine them in a waterproof patchwork sheet.
Re: Correlate Bitcoin prices with anything
#27They seem to be computing the correlation of price levels (which are completely meaningless) rather than the correlation of price difference or returns.
Any two time series which broadly moved up over the same time period will look correlated if you compute the correlation of levels. But they could in fact be completely uncorrelated (and therefore have zero predictive power) when you compute the correlation on returns, which is what you should be doing.
Re: Correlate Bitcoin prices with anything
#28This seems to be correlation of the price level, not correlation of the returns. It's pretty much a useless metric.
Not sure I understand the point... ? The reason for correlating against price is in hope of finding a leading indicator to movement so that you can better understand the relationship between bitcoin price and some other metric. This would in theory help you ultimatly make better returns by better predicting when to buy or sell...
Any two time series which move broadly in the same direction will be 'correlated' if you compute the correlation on price levels, whether they have any predictive power or not.
Correlation on price levels is meaningless, only correlation on price differences or returns is meaningful.
Re: Correlate Bitcoin prices with anything
#29Neat visualization, but as the website itself notes at the bottom (in fine print): "Correlation doesn't necessarily mean causation. Be careful when using correlations to draw causal inferences for trading or research." Here's another fun tool where you can correlate search activity by drawing an arbitrary time series: https://www.google.com/trends/correlate/draw?p=us
Why would you need a causal inference to make a trade?
When you lose money for two weeks straight, it's nice to be able to figure out if it's a statistical blip, or if there's a fundamental reason that the trade stopped working. If all you have is a statistical correlation, you can't do that, and you have to guess. If you have a causal relationship in mind, you can examine the market to see if there are reasons to believe that the causal relationship might have broken down.
Re: Correlate Bitcoin prices with anything
#30I think somethings wrong with the Dogecoin stats...