Bitcoin and NAB Rate of Return Analysis

ECON 1030 1
ECON 1030 – BUSINESS STATISTICS 1
by (Name)
Course
Professor’s Name
University
The City and State
Date

ECON 1030 2
Executive Summary
This study was geared towards evaluating the recent prices of Bitcoin and using this
information to advise investors on whether there is sufficient confidence and security in
investing in it. The study investigated the trend and rate of return of four securities in the
Australian market. From the confidence intervals computed for each of the securities, Bitcoin
had a positive rate of return of between 0.05% and 3.12%. This was the highest compared to the
rest. This, therefore, is a worthy investing project than an investor can risk investigating in.
Introduction
Cryptocurrencies are some of the blockchain technology that is gaining popularity at a
high rate in most parts of the world. One of these technologies is the Bitcoin. Considering the
myths and stories underlying these technologies, there is a need to carry out an informed
investigation using past data to predict their future and security. This study, therefore, evaluates
the recent prices of Bitcoin allows the use of this data to advise an investor on whether there is
sufficient confidence in investing in it.
Part A
Question1

ECON 1030 3
3/9/2014
5/25/2014
8/10/2014
10/26/2014
1/11/2015
3/29/2015
6/14/2015
8/30/2015
11/15/2015
1/31/2016
4/17/2016
7/3/2016
9/18/2016
12/4/2016
2/19/2017
5/7/2017
7/23/2017
10/8/2017
12/24/2017
3/11/2018
5/27/2018
8/12/2018
10/28/2018
1/13/20190
5000
10000
15000
20000
25000
30000
Bitcoin Weekly closing prices Trend
Dates
Weekly closing price
Figure 1: Bitcoin Weekly Closing Price Distribution
From the data collected from March 2014, it shows that the closing prices of Bitcoin have been
increasing steadily over time. From 2014 to the end of 2016, the average closing prices were
about 572 AU$. The closing prices increased steadily from 2017 to mid-2018 when they started
going down. From mid-2018, the price has been fluctuating and closely catching up. The highest
recorded price was 10th December 2017 with a closing price of 25,986.55 AU$.
-39.755--29.755
-29.755--19.755
-19.755--9.755
-9.755-0.244999999999997
0.245-10.245
10.245-20.245
20.245-30.245
30.245-40.245
40.245-50.2450
20
40
60
80
100
Bitcoin Weekly Rate of Return
Rate Groupings
Frequency
Figure 2: Bitcoin Rate of Return Histogram

ECON 1030 4
The histogram shows that the weekly rate of return for Bitcoin is normally distributed with no
outliers. The data bars are forming a bell shape that proofs normality of a distribution.
Question 3
Table 1: Bitcoin Descriptive statistics
Descriptive Statistics Weekly Return
Mean 1.59
Standard Error 0.78
Median 1.22
Standard Deviation 12.61
Sample Variance 159.01
Kurtosis 3.01
Skewness 0.61
Range 105.44
Minimum -39.76
Maximum 65.68
Sum 412.35
Count 260.00
Mean =Sum of the Return /Number of Observations=412.35/260=1.59
Standard Error (= σ
√ n = 12.61
√ 260 =0.78
Standard deviation=√ ∑ ( ( x−xbar )2
n−1 ¿)¿=√ ¿41,183.21 / (260-1)) =√ (159.01)=12.61
Median is the value at the middle when all the entries are arranged in ascending order. In this
case it is 1.22.
The maximum value =65.68
Minimum value=-39.76
Range =Maximum-Minimum=65.68—39.76=105.44
According to the above calculations, the average rate of return for bitcoin is 1.59% with a
standard deviation of 12.61 from the mean. The highest recorded rate of return was 65.68% with
the lowest return of -39.76%.This results in a range of 105.44. Also, the distribution has a