Quant Analyst Discredits Global M2 as Bitcoin Price Predictor
Sina, co-founder of 21st Capital, criticized Raoul Pal's Bitcoin price prediction model based on the correlation with Global M2, labeling it as a case of data illiteracy and overfitting.
- The model shifts Global M2 data forward by 10 to 12 weeks to predict Bitcoin prices.
- Sina argues this method misrepresents data and fails basic data analytics principles.
- He highlights that the Global M2 data is flawed due to mixed reporting frequencies from different countries.
- Sina demonstrated that altering lead times significantly changes outcomes, exposing the model's unreliability.
- He compared the model’s approach to fitting curves through noisy data, indicating poor predictive performance.
- Sina suggested that Bitcoin may actually lead liquidity rather than follow it, challenging the model's premise.
- Bitcoin was trading at $106,952 at press time.
