Last year and especially in the last quarter, Bitcoin (BTC) – along with much of the crypto market – experienced a significant rally, rising from around $16,000 in January 2023 to as high as $44,000 in December 2023.
However, the start of this year was marked by optimism, uncertainty and volatility. At press time, the world's leading cryptocurrency was up 0.62% in the last 24 hours to reach a price of $42,875.
BTC 1 year price chart. Source: Finbold
Bitcoin's initial moves were initially driven by widespread expectations and speculation about the likely SEC approval of spot Bitcoin exchange-traded funds (ETFs), and the cryptocurrency only became more volatile in the wake of the January 10 ETF approvals , with BTC climbing to over $48,000 this month before falling significantly.
In addition, another event is likely to have a major impact on the price of the digital asset in three months – the Bitcoin halving.
With these hopes, fears and uncertainties in mind, and with Microsoft (NASDAQ: MSFT) recently releasing its artificial intelligence (AI) platform – Copilot – based on OpenAI's ChatGPT 4 model – Finbold decided to use the Large Language Model (LLM ) to question where BTC might be at the end of 2024.
Three versions, one methodology
While other AI platforms also offer their users a selection of different models and plugins, Microsoft's Copilot is modular and enables three different conversation tones – Balanced, Precise and Creative.
With this in mind, Finbold decided to give each of the “tones” the same prompts and see how their estimates might differ. First, the AI was given the broad framework of the conversation – a hypothetical scenario that should lead to a plausible estimate.
The decision to pre-empt the conversation by pointing out that there is an understanding that the scenario is highly speculative is largely based on experience with ChatGPT – a platform that has strong reservations about price speculation unless it is clearly communicated. that there is such a scenario to understand that it actually cannot reliably look into the future.
The second and most important prompt should explain the task in detail. Limiting the range to no more than $3,000 is the result of previous experience, as another AI platform – in the wildest case to my memory – estimated that Bitcoin will be worth between $9,000 and $250,000 in a few months.
Copilot estimates the Bitcoin price for the end of 2024
Copilot's balanced and creative modes offered exactly the same price range as the likely position Bitcoin could find itself in at the end of 2024 – between $60,000 and $63,000. The main difference, as it turned out, was the justification for the estimated range.
Creative Copilot briefly touched on several key points – the AI stated that the halving will likely drive prices higher and that ETF approvals will increase interest, engagement and liquidity. She also noted that Ethereum 2.0 is a major competitor to Bitcoin and explained that she sees a gradual normalization of monetary policy as a stabilizing factor.
The Balanced Copilot focused significantly more on the math surrounding the halving. For example, the company explained that based on historical data, it expects Bitcoin to rise to 1.5 times its previous high – $97,295 – after the halving. However, it added that it believes a 33% correction can be expected with certainty. and 41%, resulting in an estimated range of $60,000 to $63,000.
As the name suggests, the Precise Copilot was significantly more cautious about speculation, landing in a very conservative year-end estimated price range – between $45,000 and $48,000.
This “tone” also offered little explanation for the estimate other than assuming a continuation of the trends and factors discussed previously – the broader exposure of ETFs, the likely impact of the halving, the move towards a somewhat clearer regulatory framework, and broad economic factors.
Disclaimer: The content of this website should not be considered investment advice. Investing is speculative. When you invest, your capital is at risk.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.