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BIZ STATS Group Assignment 2
BIZ STATS Group Assignment 2
BIZ STATS Group Assignment 2
Executive Summary
In this report, we will analyse and evaluate the investment potential of Bitcoin, by comparing
with another high-profile firm listing on the Australian stock exchange: the Macquarie Group
Limited (MAC). Graphs such a histograms and line graphs are used as data in this report to
clearer identify trends of rise and fall in closing prices as well as weekly returns, in order to
give a more comprehensive analysis and to establish the outliers by using the Z-score for each
histogram with the -3 < Z < 3 formula. . The report also calculates and interpret the three aspects
of descriptive analysis for weekly return: location, shape and spread. Results is then calculated
by using hypothesis testing and 95% confidence intervals.
A conclusion of the strengths and weaknesses of Bitcoin will be concluded in the end of this
report, based on the data produced from our findings, in order to determine if it is beneficial to
invest in Bitcoin.
Introduction
Bitcoin is a cryptocurrency which is a decentralized digital currency where users can make
purchases or payment without a need for a central clearing authority which enhances market
efficiency.
In this increasingly digital world, some believes a secure, strong and globally recognised digital
currency represents the future of finance, while some are not idealistic about the future of
Bitcoin and cryptocurrencies in general.
In this report, we will determine if it is beneficial to make an investment in Bitcoin, by
comparing it with Macquarie Group Limited (MAC) using data from closing prices, past
weekly returns, 95% confidence interval, identifying the probability of a loss ,calculating and
interpreting the three aspects of descriptive analysis for weekly return as well as hypothesis
test to support our recommendations.
A Ministerial Brief will be included at the end of our report on the conclusion on our findings
and calculations.
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PART A
1.1 Weekly Closing Price of Bitcoin
25000
20000
PRICE ($AUD)
15000
10000
5000
0
11/3/2013 11/3/2014 11/3/2015 11/3/2016 11/3/2017 11/3/2018 11/3/2019
WEEKS
The main spike in price is from 6th November 2017 till 8th August 2019, where an increase of
193% in price was seen within a span of 22months. However, the fluctuation of the price is
very huge, with a price change of 141% between 21th Nov 2017 and 4th Dec 2017. Therefore,
the graph determined that Bitcoin has great profit margin but due to its large fluctuation, it is
unstable.
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1.2 Weekly Return of Bitcoin
Figure 2 shows the weekly returns of Bitcoin as a histogram graph. It is observed that the
weekly returns graph appears to be symmetrical and hence, suggests being normally
distributed. Within the period of 11/3/2013 and 12/8/2019, it was found that among that there
were 146 weeks where weekly returns were in negative margins. In addition, there are 4
outliers we have found through the weekly returns for Bitcoin.
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