What will the Bitcoin price be at any given date? That's the 64 quintillion dollar question, but the truth is nobody knows. So, are price predictions for a volatile asset like Bitcoin a waste of time?
Many in crypto claim they're a waste of time, but the market, although manipulated, is organic. So for me, technical and fundamental analysis are vital, and the Bitcoin price doesn’t always ‘do the opposite’, even if it might seem so to those with diminishing faith.
I’m not in the game for making Bitcoin price predictions. I let people who know what they’re talking about do that and I listen to them.
Long Term Bitcoin Price Prediction
Many claim outlandish predictions, as binary as zero to $10m, but are they realistic? There are Bitcoin price prediction tools out there but can they be trusted?
Dan from Crypto Capital Ventures has recently posted a new video looking at the long term price prediction using some fundamental analysis.
While the title of his post, Shocking Bitcoin Price Data for 2020 | BTC Price Prediction is a bit ‘clickbaity’ the analysis is sound, and in my opinion the prediction isn’t shocking at all.
In it, he looks at the long-term trajectory of the Bitcoin price, and as we can see in the image below, the Bitcoin price is well within the price path laid out.
The first thing Dan points out is the price gains since the start of 2019: up about 90%. And although we saw highs around $14,000 in July, this retracement means Bitcoin is already oversold. With the Bitcoin halvening set to take place in May, this could see some bullish movement.
Dan speaks of the flow of money coming into new tech. He compares the price behaviour with that of Apple in its earlier days. Although he doesn’t compare the tech, he’s adamant that smart money is starting to realise the benefits of Bitcoin, and although the ‘Bitcoin price moves much quicker than Apple’s [historical price],’ he says, ‘which makes it an even stronger investment play.’
He doesn’t compare the technologies, because they are incomparable, but Bitcoin’s price swings are similar to that of Apple in it’s earlier days.
In the price trajectory above, we can see that Bitcoin could be hitting $100,000 in the next year or two. Shocking to some but not to all.
Bitcoin Stock To Flow Ratio
PlanB, who is well known in the crypto space, regularly tweets BTC price analysis, using the stock-to-flow (S2F) ratio. The S2F model helps predict the value of a scarce commodity like Bitcoin. To determine the value in the S2F model, you need to take the amount of BTC in circulation and divide it by the amount created every year.
And as we can see in the image of the S2F above, the trajectory is very similar to the one Dan uses in his long-term price analysis. PlanB has articulated the S2F model in great detail, and although he says it is no guarantee, he has backing from other Bitcoin OGs such as Trace Meyer and Anthony Pompliano (Pomp).
Fintech OGs Bullish on Bitcoin
Bitcoin permabull, Pomp, put his neck on the line, saying he was very confident the BTC price would be $100k by the end of 2021. As we can see this prediction is within the curve of PlanB’s S2F model and Dan’s long term price prediction.
Using sound fundamentals and basically Economics 101, Pomp stated, ‘Bitcoin is a fixed supply asset with a disinflationary supply schedule. Over the next ~2.5 years, there will be incredible increases in demand, while the total supply remains fixed and the new daily supply is decreased by 50%.’
Pomp also claims it could be even more risky to hold the US Dollar than Bitcoin in the long term. A bold statement indeed, but when you look into the logic of his argument, it’s hard to disagree.
Other Bitcoiners are even more bullish. Legendary Venture Capitalist Tim Draper claims the price of a Bitcoin will be $250,000 by no later than 12 months after the halvening.
That’s nothing compared with everybody’s favourite fugitive John McAfee. The Libertarian, who’s currently on the run, is still standing by his claim that Bitcoin will be worth $1 million by the end of this year. He’s so confident in his prediction that if it doesn’t he will eat his own sexcaliber live on television.
Let’s Hope He’s Right!
Predicting Bitcoin’s price is a pretty much impossible task. Nobody can predict the future, but I am confident the bulls will take charge again. The fundamentals are too positive for it not to.
I would never make bold price predictions, I leave that to the people who know better. But I am confident in Bitcoin’s significance in time. It’s just a pity it’ll be too late to stop John McAfee’s televised feast.
Contact the author: