Application of Machine Learning for Bitcoin Trading

Aug 3, 2021

The aim of this paper is to compare and analyze different approaches to the problem of automated trading on the Bitcoin market.

We compare simple technical analysis method with more complex machine learning models. Experimental results showed that the performance of tested algorithms is promising and that Bitcoin market is still in its youth, and further market opportunities can be found. To the best of our knowledge, this is the first work that tries to investigate applying machine learning methods for the purpose of creating trading strategies on the Bitcoin market.

Application of Machine Learning for Bitcoin trading in the blockchain technology, bitcoin creates a series of transactions that are permanent on the blockchain and creates an immutable record of each transaction. Each transaction has its own characteristics such as the creation of money, sending and receiving bitcoin and each transaction has unique characteristics such as value, name, address of the sender, recipient, currency, etc.

A new characteristic is added to every transaction. This characteristic or a combination of characteristics are taken as an input and a machine learning algorithm is used to predict whether the user will or will not buy a particular bitcoin. The predictions are made at a very fast rate of tens to thousands of transactions per second and can be very accurate. ###Machine learning has been used in a variety of areas such as image recognition, language translation, and stock market trading. It provides the ability to learn and improve with experience. The idea of machine learning is to create a program that can learn without being explicitly programmed. It takes data, processes it, and makes a decision based on that data. In the area of bitcoin trading, machine learning has helped to improve the speed of trading, and improve the accuracy of predictions. Machine learning can be used to predict the value of a bitcoin by looking at the past data.

Machine learning models are increasingly commonly used in the financial industry to analyze market data.

The market of cryptocurrencies is growing at a high rate. People are not only interested in making profits on cryptocurrencies but also in understanding the underlying technology. In this essay, I will try to explain some of the ways in which Machine Learning helps us in analyzing Bitcoin trading.

Read the paper

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