A demonstration of multiple linear regression applied to Bitcoin Price.

This is an applied technical exercise on time-series forecasting using historical Bitcoin closing price data, using the Prophet package in Rstudio.

Disclaimer: This is not financial advice. This is an exercise in applied portfolio analysis & optimization for cryptocurrency, in Rstudio. Portfolio Optimization is often applied to stocks. Today, we will apply this tool to cryptocurrencies, to determine the best percentage allocation of each selected token. This analysis stems from Modern Portfolio Theory (MPT), which denotes that the ideal portfolio exists to provide one max returns coupled with optimal risk. A key component of this analysis involves calculating the Sharpe ratio. The higher the Sharpe ratio, the better the portfolio’s risk-adjusted performance.