. <span>Photo by <a href="https://unsplash.com/@silverhousehd?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText">André François McKenzie</a> on <a href="https://unsplash.com/s/photos/bitcoin?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText">Unsplash</a></span> ## Bitcoin Forecasting Based on a report by the [Wall Street Journal](https://www.youtube.com/watch?v=HhOuvNDMlI0), Bitcoin is surging due to an increase in investor enthusiasm and technology that allow more novice investors to begin trading, while also being a hedge against the dollar due to the global affairs. In this notebook, we investigate further the relationship between these data points and try to fit a model to predict the price of Bitcoin using VAR, XGBoost, and Facebook Prophet. <iframe width="560" height="315" src="https://www.youtube.com/embed/58qj2DkD454" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe> Check out the notebook [here](https://github.com/jose-dom/bitcoin_forecasting) We will use Yahoo Bitcoin History, the data is free to download. Available [here](https://finance.yahoo.com/quote/BTC-USD/history?p=BTC-USD&guccounter=1&guce_referrer=aHR0cHM6Ly90b3dhcmRzZGF0YXNjaWVuY2UuY29tL3ByZWRpY3RpbmctcHJpY2VzLW9mLWJpdGNvaW4td2l0aC1tYWNoaW5lLWxlYXJuaW5nLTNlODNiYjRkZDM1Zg&guce_referrer_sig=AQAAADw3s4Aaum1jPPN-7OIUDQmu6j4SiVGzs0U51SpDhE84Ec30JpqsegxOZYH5lnrNdcM-ZqTtFRI7VLXpikmV4GPDk1ZDnQeBQrtA4W96EdxGo0dwZbtcLWqtK3z3POErPkEb1VvQe0PF8fBlArbyg2HguzJ8pEXcT7ptl3tqR5iZ). We are also using US Dollar Index Futures Historical Data from Investing.com. Available [here](https://www.investing.com/currencies/us-dollar-index-historical-data).
Forecasting Bitcoin Price
During a wild year in the markets the riskiest asset is one of the popular today. After a historic climb and crash three years ago, bitcoin is at it again in 2020. Like last time, a surge of investor enthusiasm is driving it to all-time highs, and bitcoin enthusiast's say that this is only the beginning. They see bitcoin as a revolution in financial systems, this has been the message for about 11 years and people are finally starting to listen and take note. But many experts watching bitcoin warn that the asset is too volatile for average investors and that its a purely speculative bet that won't be able to scale.