Numeraire price prediction: AI competition gains attention

• Updated

The AI tournament to win crypto through stock prediction is pricking the ears of investors

The NMR logo depicting white shapes on a black hexagon, displayed against a white disc                                 
Over 4,730 staked models control the Numerai hedge fund – Photo: Shutterstock
                                

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Numerai claims to run the “hardest data science tournament on the planet”. The AI-based hedge fund is rewarding users with cryptocurrency if they can build computer models that correctly predict the stock market’s future.

It has not been an easy ride for the Numeraire (NMR) token. But with a recent breakout, and 830,115 Numeraire at stake, what might be next for the ‘Last Hedgefund’?

What is Numeraire (NMR)?

Numerai is an artificial intelligence-based hedge fund that is crowd-sourcing its decisions through a series of competitions. Developers and data scientists are being encouraged to create machine learning models that improve the hedge fund.

If the developers can create a model that makes accurate predictions, they gain cryptocurrency rewards. However, a failed model will result in staked cryptocurrency being lost.

Numerai was founded in 2015 and is located in San Francisco. It was created by Richard Craib, who is the chief executive of the hedge fund. He has studied at the University of Cape Town, Cornell University and UC Berkeley. Numerai is the beginning of his professional career.

From the Numeraire whitepaper

The whitepaper states: “Machine learning competitions are susceptible to intentional overfitting. Numerai proposes Numeraire, a new cryptographic token that can be used in a novel auction mechanism to make overfitting economically irrational.”

It goes on to say: “The auction mechanism leads to equilibrium bidding behaviour that reveals rational data scientists’ confidence in their models’ ability to perform well on new data. The auction mechanism also yields natural arguments for the economic value of a Numeraire token.”

The Numerai tournament

The purpose of Numerai revolves around its tournament. The goal of the competition is to correctly predict the future of stocks using data from the current market.

Developers build a model and then submit the predictions on the platform. They can stake the native token Numeraire (NMR) to potentially earn from the model.

The whitepaper states: “Staking uses the ‘skin in the game’ principle. In order to be eligible for rewards, you must put up something yourself that is at risk. So you put up a stake on your model. And then if your predictions turn out to be accurate, your stake remains and you earn additional rewards. But if your predictions turn out badly, you lose some of your stake.”

Any staked NMR that is lost from bad predictions is then burned. This helps bring the value of the token higher despite the poor predictions.

Unlike most cryptocurrencies, burning tokens is not the goal for Numerai. According to its whitepaper, the hedge fund is crucial for the token to “thrive and profit”. There are no quantitative analysts at Numerai, so a developed AI product is essential to its survival.

NMR’s price history

Numeraire kicked off its journey in 2017 with it listing on CoinMarketCap at $35 on 23 June. It raced to a high of $168.49 two days later, before plummeting below $30 the following month and below $20 in December.

The price of NMR started to track the wider crypto market. It saw gains at the beginning of 2018 where it climbed to a high of $53.19 on 13 January.

Despite dropping slightly, it maintained above the $20 level. This occurred as Numerai increased the payouts of its tournament by five times in February.

But like the wider bearish market, it eventually dropped back under $20. This trend stuck with the cryptocurrency and by November it stooped to its all-time low of $1.93.

Its next substantial rally happened almost two years later as Coinbase supported the cryptocurrency in August 2020. Users could buy, sell, convert, send, receive and store NMR. The token reached a high of $66.39 at the end of the month.

Numeraire climbed even higher in the first quarter of 2021. It rocketed to $93.10 on 17 April. While it was unable to keep the momentum going in the short run, the coin came close again in September when it passed $50. This followed a massive release of data by Numerai for developers to base their models on.

NMR eventually dropped back below $30 at the beginning of 2022. The descent continued, exacerbated by extreme market conditions. On 18 June, the token fell to a two-year low of $7.58.

However, since then the token has seen some impressive rallies. An intraday high on 30 June of $35.69 meant it was briefly almost four times the opening value of the previous day. Although NMR corrected itself in the following days, another rally began on 21 July. At the time of writing, up over 30% in a recent 24-hour trading window. The token is currently worth $19.71.

Numeraire price prediction

The forecasts depend on who you ask, but there are some making a pessimistic NMR price prediction. WalletInvestor is an example of this, calling Numeraire a “bad” investment. Its Numeraire price prediction for 2022 says the token will drop to $2.02 in a year’s time. 

DigitalCoinPrice expects a strong future with its Numeraire coin price prediction. The average price is estimated to grow from $25.79 in 2022 to $36.92 in 2025. Its Numeraire price prediction for 2030 expects it to pass $90.69 and reach $103.55 in 2031.

PricePrediction is also more reserved in the shorter term over NMR. The token is predicted to average out at $15.80 this year. However, the Numeraire price prediction for 2025 says it will hit $46.61 and rocket past $330 in 2030, reaching $478.65 in 2031.

The outlook from Trading Beasts is less optimistic. Its Numeraire crypto price prediction suggests it will only reach around $20 in 2025.

FAQs

There are currently just under 5.9 million NMR in circulation.

It might be. Those building models that can predict stock markets can see a return on their investment. However, if these forecasts are incorrect, stakers will risk losing their funds. Remember, you should never stake more than you can afford to lose.

Forecasters offer a divided opinion. PricePrediction suggests it will rocket past $300 in the next decade, whereas WalletInvestor says it will eventually drop below $1. Predictions are not always correct, so you should always carry out your own research.

It depends. NMR has had a bumpy ride, with its price history being particularly volatile. The token is currently rallying and is up more than 135% in the past 30 days. But this is not guaranteed to continue, so you should never invest more than you can afford to lose.

Further reading

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