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IIIT Delhi researchers develop AI-driven conventional financing to predict crypto prices

On available cryptocurrency data, it was shown that the said method is very precise in predicting future prices.

Furthermore, the work is claimed to be accepted at Elsevier Information Sciences.
Furthermore, the work is claimed to be accepted at Elsevier Information Sciences.

Indraprastha Institute of Information Technology Delhi (IIIT-Delhi) researchers have developed an artificial intelligence (AI) driven approach to predicting cryptocurrency prices, as per an official statement.  According to it, Shalini Sharma, a PhD scholar of IIIT-Delhi and  Angshul Majumdar, Sharm’s  supervisor started with the conventional Baum-Welch framework but incorporated deep learning within it.

Furthermore, it mentioned that there are two predominant approaches for financial (or any) prediction. One is based on conventional methods of the 70s, the celebrated Baum-Welch approach to making money in stock markets. “The information about uncertainty is crucial in making financial decisions. However, this approach requires knowledge about the underlying events causing the changes in price; this information is not available for cryptocurrencies,” it said.

The other approach, according to it, is modern, driven by a bleeding-edge AI called deep learning. “Deep learning is abstract but does not require knowledge/information about underlying factors. Unfortunately, it cannot give uncertainties about the predictions; this precludes the interpretability aspects,” the statement said.

Furthermore, the work is claimed to be accepted at Elsevier Information Sciences. On available cryptocurrency data, it was shown that the said method is very precise in predicting future prices. It can beat all state-of-the-art methods in terms of accuracy. Furthermore, the uncertainty estimates make the results more interpretable.

The researchers showed that the uncertainty estimates obtained from their method are correlated with historical crypto volatility index (CVI) values, which refer to how much a cryptocurrency fluctuates with time. As a result, the method aimed to prove that the predictions made by their method are interpretable.

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First published on: 02-11-2022 at 16:00 IST