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Cryptocurrency and Coxcombs – What can Florence Nightingale tell us about Bitcoin prices?

Florence Nightingale is perhaps best known as the founder of modern nursing. One of her less well known legacies for the use of infographics, and how they effectively communicated the meticulous records she kept of the death toll from wounds in the Crimean War.

“Diagram of the causes of mortality in the army in the East” by Florence Nightingale

Nightingale developed a modified version of the pie-chart, where the magnitude of a measurement was represented by the area of each segment. The coloured wedges describe the causes of mortality and the number of deaths each month. Nightingale called the compilation of  these graphics a ‘coxcomb’, although the term was used interchangeably for individual graphs. She knew that traditional statistical reports would be far less effective in communicating the poor conditions for medical care in the Crimean War. Nightingale needed to make the point immediately evident in her reports to Parliament that soldiers were dying needlessly from preventable causes (shown in the blue segments above), including poor sanitation and malnutrition. Her clear and effective communication was recognised, and in 1859 Nightingale was elected as the first female member of the Royal Statistical Society.

Coxcomb diagrams can be particularly effective at showing seasonal trends. Bitcoin’s wildly volatile price swings have dominated recent headlines. The meteoric rises in price of both Bitcoin and other cryptocurrencies have led many to declare it as nothing more than a speculative bubble. The recent frenzied exuberance for Bitcoin by mainstream investors echoes the greed of the dotcom bubble of the 1990s.

Many media outlets have declared the recent dip as a ‘crash’, while Bitcoin supporters argue that that it is a simply a correction that often occurs around this time of year. It is difficult to distinguish seasonal patterns from a line graph of the full history of Bitcoin prices, due to the recent dramatic increase in price setting the scale for the rest of the diagram. To attempt to better understand seasonal changes in price, I developed modified coxcomb diagrams in Tableau for the past 7 years of Bitcoin prices. The inner segments represent the lowest closing price for the month, while the outer segments show the highest closing price. Rather than calculating the area for each segment, the price is used for the radius of the segment. The data was sourced from CoinDesk.

While the coxcombs of prices show interesting patterns for each year individually, it is difficult to compare prices between years. Every year has a different scale; we are unable to make a comparison between the magnitude of change in price each year. Further work is required to investigate a possible ‘January effect’ in Bitcoin prices. While we may not have solved the question of whether Bitcoin has crashed, the exercise was useful in exploring novel data visualisation methods. Coxcomb diagrams are not naively built into Tableau, so each individual point was calculated and plotted as a ‘polygon’ graph. You can download the workbook from the Tableau Public link above to see the details of how I created the visualisation.