From the course: AI in Fintech Essential Training

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Algorithmic trading of cryptocurrencies

Algorithmic trading of cryptocurrencies

From the course: AI in Fintech Essential Training

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Algorithmic trading of cryptocurrencies

- [Instructor] The point of financial models is not to just build them for fun, right? Unless of course you're at the world's most boring Christmas party, right? Instead, the point of a financial model is to give us meaningful insight that we can use for trading purposes. The same thing holds true in cryptocurrency landscape. I'm in the 04_04_Begin Excel file. Now let's pretend that we've toyed with this financial model and we're happy with the assumptions that we've made. So, we've come up with a 2019 value for Bitcoin of $8,600, and based on our discount rate we think that the ultimate value of Bitcoin is about $11,500. Well, one thing we may want to do is turn to algorithmic trading to enable us to capitalize on this type of a model. Our goal here would be to buy or sell Bitcoin based on our expected value of Bitcoin, in this case $8,600, versus where Bitcoin is trading a present. So, how can we do that? Well…

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