What’s Bitcoin?
Launched over ten years ago in 2009, Bitcoin is a virtual currency powered by blockchain technology. The coin was created by Satoshi Nakamoto to overcome the shortcomings of government-issued currencies without requiring a controlling authority. It has since then grown in popularity.
The popularity of BTC has led to more people scrambling to get a place on the Bitcoin train when time is still prime. While this had a direct impact on the crypto’s price, it invited unlikely guest-huge price swings. From cents, it appreciated to $20K per BTC then spiraled down to $3K. Bitcoin (BTC price encountered massive turbulence.
For context, in October 2009, one bitcoin exchanged hands at $0.0009 only for it to shoot to slightly above $20,000 towards the end of 2017. Unfortunately, at the beginning of 2018, the price dropped to $14,000 and closed the year at almost $4,000 flat ($3,742).
To keep the fire burning, King Crypto initiated a resistance at the beginning of 2019, helping the price to gradually peak and close the year at above $7,000 ($7,193). Since then, it has tested prices above $10,000 and is currently retailing at slightly above $7,000.
Key past Bitcoin moments to note
The popularity of bitcoin brought with it a host of other problems and opportunities. For example, in 2019, scammers stole $722,000 million from unsuspecting investors who were fooled into investing in non-existent BTC mining equipment. Mostly, scammers use websites whose registration dates and copyrights raise questions into their credibility.
A scammer website will have ‘copyright 2020’ status, for instance, only for it to include content from other sources to lure investors. Other events in the past negatively impacting on the price of bitcoin include the Mt. Gox and Bitfinex hacks.
In May 2019, when Craig Wright, an Australian entrepreneur, claimed to be the anonymous creator of the King Crypto and went to the court requesting to copyright bitcoin files, the price of BTC jumped from $7,945 to $8,544 in just ten days.
A hack on a cryptocurrency exchange is seen as a precursor to falling virtual currency prices. Interestingly, when Binance was hacked in May 2019, the price of appreciated by almost $1,000 in ten days; from $6,029 to $7,259.
What before making any investment decisions
Regulations around this asset are mostly vague, and a country may have different rules. In the United States, for example, there are moves to regulate this asset class while in India, regulators are yet to declare their stand explicitly.
Apart from regulations, the volatility of cryptocurrency prices is another factor to consider before investing in bitcoin or any other virtual currency. Crypto prices are driven by market news, views and opinions, predictions from respected figures in the space, major acquisitions involving crypto-centric entities, among other factors.
With such unpredictable events, the price can rise fast and plummet equally fast. Unlike in traditional markets where risk-averse investors are at peace, the crypto market involves a lot of risks.
Fortunately, bitcoin and other leading cryptocurrencies have the biggest returns on investment when compared to traditional investments. For instance, between 2010 and Dec 2019, someone who invested $1 in Netflix stocks fetched a return-on-investment of $4,177. However, someone who invested $1 into bitcoin had an RoI of $90,000 within the same period.
Apart from the RoI, thorough research before making any investment or giving any recommendation to buy a second thought is vital. When presented with a crypto investment policy please check for any suspicious signs. Check for things like ‘ all rights reserved’ and a clause on how to exit the policy.
Luckily, it’s not all complicated on the other side. In the forex space, terms like 2020 forexstreet S L (stop loss) orders are common. In the crypto space, the stop loss functions are available when trading on a cryptocurrency exchange. This helps cushion the investor in case of a total loss, partly eliminating the emotional distress that comes with investing in uncertainties markets such as crypto.
How the price prediction for Bitcoin is done
With the volatility of the price of bitcoin, a new phenomenon has picked up; prediction of when and by how much the price of the king crypto will have the biggest RoI. This is meant to attract investments into the crypto space and assure investors all will be well despite the existing highs or lows in price.
For credibility, bitcoin price predictions are not made out of thin air. Analysts take into account data, such as BTC USD daily buy or sell orders from various exchanges,
the happenings in the cryptocurrency space and project how these events are likely to positively or negatively affect the price of bitcoin.
One factor that predictors use is cryptocurrency exchange inflows. Recently, the chief economist of Chainalysis, a leading blockchain and cryptocurrency research firm, Philip Gradwell, noted that exchanges are recording an increase of up to 250 percent in daily inflows, indicating heightened volatility.
What about bitcoin halving?
Halving is a hard-coded event in bitcoin’s blockchain where the amount miners make for each bitcoin mined will be slashed by half. With the event anticipated to take place in May this year, analysts are projecting that it will have a massive impact on the price of bitcoin. For instance, CryptoQuant’s data analyst, Joe Nemelka, predicts that the price of bitcoin will rise because only profitable miners will see the need to keep mining after the rewards are halved.
Global pandemics such as coronavirus are another primary consideration when making bitcoin price predictions. According to Gradwell, the current COVID-19 pandemic is making it hard to foresee how the price of bitcoin will behave.
Professional and retail traders are another focal point in making short or long term predictions. However, the actions of professional bitcoin traders, owing to their large appetites, are considered to carry more weight in driving prices upwards. For example, the early 2020 bitcoin rally was attributed to institutional investors dipping their fingers into the bitcoin jar.
Notable past Bitcoin price predictions
After the meteoric rise in 2017, commentators gave wild predictions in 2018 hoping to reignite the energy in the crypto space even in a bearish market.
In 2019, Fundstrats Global Advisors’ Tom Lee predicted that bitcoin would hit $10K in the first quarter of the year. Although it did not do so in the first quarter, it reached $10K in the second quarter of 2019. Lee then gave a bitcoin price prediction of $40K before the end of 2019.
To follow in Lee’s footsteps, Max Keiser, a filmmaker and broadcaster, predicted that the price of bitcoin would hit $28K by the end of 2019. Unfortunately, these two predictions never came to be as bitcoin closed 2019 at $7,193.
Others like John McAfee have, in the past, made a wild bitcoin price prediction of $1 million. But, he’s not done yet with the $1 million predictions. Even after largely missing the prediction, he has converted it into a short term prediction to be fulfilled before the end of 2020.
Short term 2020 bitcoin predictions
At a time when the coronavirus pandemic continues to ravage both the crypto and traditional financial spaces, commentators see a brighter near and distant future for bitcoin.
In 2020, commentators are largely pegging their predictions on the halving event. Commentators are drawing inspiration from a similar event that happened in 2015. After the halving, the price of bitcoin saw a 93 percent increased by the end of that year. If the same applies to 2020, a short term bitcoin price prediction squarely puts the price close to $15K ($14,800), provided the price during halving will be hovering around $7.5K.
Another short term bitcoin price prediction by WalletInvestor, a crypto prediction platform, predicts that the king crypto will be exchanging hands at slightly below $11k ($10,723) by the end of 2020.
Joe Kernen, CNBC’s Squawk Box host, predicts that bitcoin will retail at $55K before the end of the first half of 2020.
Anthony Pompliano, the founder of Morgan Creek Digital, has restrained himself from giving a solid figure of where the king crypto’s price will be after halving. Instead, Pompliano anticipates seeing a positive impact before the end of 18 months after halving.
Kelvin Koh, a former Goldman Sachs partner, has drawn inspiration from the early 2020 bitcoin rally to predict the start of something bigger. Koh’s bitcoins price prediction puts bitcoin at $40K per piece before the end of this year. With this being more than a 400 percent jump from the current prices, the ex-Goldman Sachs partner is betting on the reduced BTC supply after halving.
Tradingbeasts, a platform offering cryptocurrency predictions, is not so bullish on bitcoin’s price in the short term. For instance, its May, July, and September 2020 predictions put the price of the king crypto at a maximum of $8,218, $8,135, and $7,995, respectively.
Long term Bitcoin predictions – 2023-2025
Predictions focusing on five years to come are equating the BTC USD ratio to as high as 1:160,000. The bitcoin price prediction putting BTC at $160,000 is relying on major upward moves in the history of bitcoin. This includes the time the king crypto took to move from one high to another high.
Even though some are pumped in the long term, other predictions are not promising wide price appreciations in the next five years. WalletInvestor, for example, has a bitcoin price prediction of $20,106, $33,510, and $53,617 by the end of 2022, 2024, and 2025 respectively.
LongForecast is keeping its fingers crossed until 2023, where it gives a minimum of $22,390 and a maximum prediction of $25,975 by the end of 2023.
Others like DigitalCoinPrice are more skeptical in their BTC predictions putting the price at $17,872 in 2025.
Popular figures in the cryptocurrency circles are betting big on the price of bitcoin in the next few years.
Max Keiser, for example, is putting the price of the King Crypto at $400,000. Max sees an attractiveness at the current price range as compared to when it was retailing at $100.
Tim Draper, a venture capitalist, is confident that the leading cryptocurrency will exchange hands at $250K at least by the time the crypto train arrives in 2024.
Changpeng Zhao, Binance’s CEO and a respected figure in the cryptocurrency community, has made a rare bitcoin price prediction. Even though he did not put a number on it, Zhao predicts that the price of bitcoin has higher chances of increasing after the halving event.
Unfortunately, while some like Keiser is in high spirits,
platforms such as Tradingbeasts are bearish. In Dec 2020, the platform places the price of bitcoin at a maximum of 12,428 and $15,000 in Dec 2023.
What’s Bitcoin price beyond five years?
Those providing a bitcoin price prediction of beyond five years are optimistic early investors will have a more significant RoI.
Bobby Lee, the Ballet wallet CEO, predicts that the price of the king crypto will likely touch $500K by the end of 2028. For Lee, the market capitalization of bitcoin will ultimately surpass that of gold, which will eventually bring its price to $1 million.
It seems more people are salivating to a time when bitcoin hits 1$1 million. The co-cofounder of Civic, Vinny Lingham, has a bitcoin price prediction of $100K and a maximum of $1 million by the time we set foot in 2030.
Although its hard to anticipate how the crypto market will behave in the next 20 years, some commentators and prediction websites are placing the price of the BTC at $1 million by 2050.
Positive Bitcoin forecast : The call for more upside potential has been taken up by other analysts.
Update
20 August 2020
The Bitcoin price line fell below the $11700 level on the 19th of August and expected to fall towards the $10000 to $11000 range, where it will gain more momentum, followed by a retest of the $12000 resistance. In that scenario, the cryptocurrency will most likely break across the strong resistance and rise towards the $13000 mark.
28 August 2020
Bitcoin has recovered from the damages of the August 27 decline and the BTC/USD pair is currently trading above $11,500. BTC price action surged on August 28 reaching peaks of $11,552 on crypto exchanges such as Coinbase.
Nevertheless, there is a fresh on-chain analysis that signals just a few sellers preventing the price from moving beyond this level. As per data from WhaleMap, shared by crypto trader Byzantine General on Twitter, there is minimal resistance stopping BTC from rallying above the current levels. The analyst claims:
“To add to this…: This chart shows where bitcoins where accumulated at. What do you see? There are very few bag holders left. Meaning, there is little sell pressure left. The only real sell pressure now is people taking profits.”
Crypto bull and analyst at Bloomberg Intelligence, Mike McGlone, on Aug.19 highlighted how the BTC supply and demand movements indicate prices are inclined to rise eventually.
In other news, some of the prime names on Wall Street recently backed Bitcoin to reach astronomical levels. The founders of U.S.-based Gemini Exchange, the Winklevoss twins, used the parallels between BTC and gold to give the top crypto a massive valuation of $500,000 per bitcoin, a 45-fold rally from Thursday Aug. 27.
