International Journal of Advanced Engineering Research and Science (IJAERS) [Vol-5, Issue-1, Jan- 2018] https://dx.doi.org/10.22161/ijaers.5.1.11 ISSN: 2349-6495(P) | 2456-1908(O) www.ijaers.com Page | 64 Weighted Moving Average of Forecasting Method for Predicting Bitcoin Share Price using High Frequency Data: A Statistical Method in Financial Cryptocurrency Technology Nashirah Abu Bakar 1 , Sofian Rosbi 2 1 Islamic Business School, College of Business, Universiti Utara Malaysia, Malaysia 2 School of Mechatronic Engineering, Universiti Malaysia Perlis, Malaysia Abstract— Bitcoin is a type of cryptocurrency that implemented decentralized digital currency method. The transaction is monitored and validated by peer-to peer system using hash programming. These transactions are verified by network nodes through the use of cryptography and recorded in a public distributed ledger called a blockchain. The objective of this study is to forecast the Bitcoin exchange rate using weighted moving average method. Data selected in this study are selected hourly from 14 th December 2017 until 18 th December 2017. The forecasting method is using weighted moving average. Then, the validity of the forecasting model is validated using mean absolute percentage error (MAPE) calculation. Results indicated mean absolute percentage error is 0.72%. Therefore, the moving average method is considered as reliable forecasting method for Bitcoin exchange rate. The finding of this study will help investors to make best decision regarding suitable portfolio for their investment. Keywords— Bitcoin, Financial technology, Forecasting method, Statistical approach, Cryptocurrency I. INTRODUCTION Bitcoin is a type of cryptocurrency that implemented decentralized digital currency method. The transaction is monitored and validated by peer-to peer system using hash programming. These transactions are verified by network nodes through the use of cryptography and recorded in a public distributed ledger called a blockchain. Bitcoin become popular when the price for 1 Bitcoin was aggressively increased. This condition was attracted more investors to invest in Bitcoin cryptocurrency transaction. Bitcoin was developed by Satoshi Nakamoto. Bitcoin is a crypto-currency based on open-source software and protocols that operates in peer-to-peer networks as a private irreversible payment mechanism. The protocol allows cross-border payments, for large and small items, with little or no transactional costs (Nakamoto, 2009). The bitcoin transactional system is often described as an anonymous system, although it might be more accurate to describe the system as one in which users can invoke privacy. The ledger of account for all Bitcoin transactions is public and distributed (Simser, 2015). According to Christopher (2014) Bitcoin operates via a peer-to-peer (P2P) network. P2P networks are created when multiple individuals run the necessary software on their individual computers and connect to each other. Bitcoin is different with traditional method of payment. Abu Bakar et al. (2017) highlight several main differences between traditional digital currency and cryptocurrency transaction process. In definition, current fiat money is money in any form when in actual use or circulation as a medium of exchange, especially circulating banknotes and coins. This type of money is government-issued currencies. Comparing to cryptocurrency, Bitcoin is digital currency in which encryption techniques are used to regulate the generation of units of currency. Even there are many advantage using a Bitcoin cryptocurrency but the problem arises is either Bitcoin cryptocurrency can be a good medium of exchange due to high volatility and risk. Therefore, this study tries to fulfill this gap by forecasting Bitcoin exchange rate using weighted moving average. II. LITERATURE REVIEW Over the last few years, a wide range of digital currencies, such as BitCoin, LiteCoin, PeerCoin, AuroraCoin, DogeCoin and Ripple, have emerged (Ciaian et al., 2014). The most popular is Bitcoin. It has been getting a lot of media attention, and its total market value has reached 20 billion USD in March 2017 (Chiu and Koeppl, 2017). The price of the Bitcoin cryptocurrency has risen from December 2016, moving to USD 13282.29 in early December 2017. This value show the Bitcoin