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A New Approach to Predicting Cryptocurrency Returns Based on the Gold Prices with Support Vector Machines during the COVID-19 Pandemic Using Sensor-Related Data

In a real-world situation produced under COVID-19 scenarios, predicting cryptocurrency returns accurately can be challenging. Such a prediction may be helpful to the daily economic and financial market. Unlike forecasting the cryptocurrency returns, we propose a new approach to predict whether the r...

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Autores principales: Mahdi, Esam, Leiva, Víctor, Mara’Beh, Saed, Martin-Barreiro, Carlos
Formato: Online Artículo Texto
Lenguaje:English
Publicado: MDPI 2021
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8469794/
https://www.ncbi.nlm.nih.gov/pubmed/34577525
http://dx.doi.org/10.3390/s21186319
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author Mahdi, Esam
Leiva, Víctor
Mara’Beh, Saed
Martin-Barreiro, Carlos
author_facet Mahdi, Esam
Leiva, Víctor
Mara’Beh, Saed
Martin-Barreiro, Carlos
author_sort Mahdi, Esam
collection PubMed
description In a real-world situation produced under COVID-19 scenarios, predicting cryptocurrency returns accurately can be challenging. Such a prediction may be helpful to the daily economic and financial market. Unlike forecasting the cryptocurrency returns, we propose a new approach to predict whether the return classification would be in the first, second, third quartile, or any quantile of the gold price the next day. In this paper, we employ the support vector machine (SVM) algorithm for exploring the predictability of financial returns for the six major digital currencies selected from the list of top ten cryptocurrencies based on data collected through sensors. These currencies are Binance Coin, Bitcoin, Cardano, Dogecoin, Ethereum, and Ripple. Our study considers the pre-COVID-19 and ongoing COVID-19 periods. An algorithm that allows updated data analysis, based on the use of a sensor in the database, is also proposed. The results show strong evidence that the SVM is a robust technique for devising profitable trading strategies and can provide accurate results before and during the current pandemic. Our findings may be helpful for different stakeholders in understanding the cryptocurrency dynamics and in making better investment decisions, especially under adverse conditions and during times of uncertain environments such as in the COVID-19 pandemic.
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spelling pubmed-84697942021-09-27 A New Approach to Predicting Cryptocurrency Returns Based on the Gold Prices with Support Vector Machines during the COVID-19 Pandemic Using Sensor-Related Data Mahdi, Esam Leiva, Víctor Mara’Beh, Saed Martin-Barreiro, Carlos Sensors (Basel) Article In a real-world situation produced under COVID-19 scenarios, predicting cryptocurrency returns accurately can be challenging. Such a prediction may be helpful to the daily economic and financial market. Unlike forecasting the cryptocurrency returns, we propose a new approach to predict whether the return classification would be in the first, second, third quartile, or any quantile of the gold price the next day. In this paper, we employ the support vector machine (SVM) algorithm for exploring the predictability of financial returns for the six major digital currencies selected from the list of top ten cryptocurrencies based on data collected through sensors. These currencies are Binance Coin, Bitcoin, Cardano, Dogecoin, Ethereum, and Ripple. Our study considers the pre-COVID-19 and ongoing COVID-19 periods. An algorithm that allows updated data analysis, based on the use of a sensor in the database, is also proposed. The results show strong evidence that the SVM is a robust technique for devising profitable trading strategies and can provide accurate results before and during the current pandemic. Our findings may be helpful for different stakeholders in understanding the cryptocurrency dynamics and in making better investment decisions, especially under adverse conditions and during times of uncertain environments such as in the COVID-19 pandemic. MDPI 2021-09-21 /pmc/articles/PMC8469794/ /pubmed/34577525 http://dx.doi.org/10.3390/s21186319 Text en © 2021 by the authors. https://creativecommons.org/licenses/by/4.0/Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/).
spellingShingle Article
Mahdi, Esam
Leiva, Víctor
Mara’Beh, Saed
Martin-Barreiro, Carlos
A New Approach to Predicting Cryptocurrency Returns Based on the Gold Prices with Support Vector Machines during the COVID-19 Pandemic Using Sensor-Related Data
title A New Approach to Predicting Cryptocurrency Returns Based on the Gold Prices with Support Vector Machines during the COVID-19 Pandemic Using Sensor-Related Data
title_full A New Approach to Predicting Cryptocurrency Returns Based on the Gold Prices with Support Vector Machines during the COVID-19 Pandemic Using Sensor-Related Data
title_fullStr A New Approach to Predicting Cryptocurrency Returns Based on the Gold Prices with Support Vector Machines during the COVID-19 Pandemic Using Sensor-Related Data
title_full_unstemmed A New Approach to Predicting Cryptocurrency Returns Based on the Gold Prices with Support Vector Machines during the COVID-19 Pandemic Using Sensor-Related Data
title_short A New Approach to Predicting Cryptocurrency Returns Based on the Gold Prices with Support Vector Machines during the COVID-19 Pandemic Using Sensor-Related Data
title_sort new approach to predicting cryptocurrency returns based on the gold prices with support vector machines during the covid-19 pandemic using sensor-related data
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8469794/
https://www.ncbi.nlm.nih.gov/pubmed/34577525
http://dx.doi.org/10.3390/s21186319
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