Bitcoin Long-Term Overview
Bitcoin opened 2018 with a high of $13,290 and closed the year at about $3,800. This represents a 72% loss overall. By comparison, the Dow opened the year at $24,824 and close at about $23,300. This represents a 6.2% loss overall for traditional investors.
However, 2019 is a different story as bitcoin opened it at $3,700 but climbed up by almost 60% (as of today) and is currently hovering around $5,900.
If we are honest, bitcoin is still, for the most part, a favorite toy of experienced and less experienced speculators but number of builders is burgeoning as well. The surrounding ecosystem and infrastructure is being built at blinding pace while brand presence and recognition are hitting all time highs, especially among the younger generation.
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The old establishment, comprised of mostly old white men, is still yelling at bitcoin, throwing jabs, insults and calling for a ban (best evidence of their glaring lack of understanding of how bitcoin works). Luckily, biology is on bitcoin’s side – the old ruling class and archaic technologies they cling on are dying off, making room for new ideas and technologies.
Bitcoin already owns real estate in the heads of the upcoming decision makers and wealth holders and it is only question of when, not of will, bitcoin enter the mainstream financial world.
Let’s take a look at historic price action and then the fundamental forces that will propel bitcoin upwards in 2020.
We can divide the fundamentals into two categories: protocol enhancements and ecosystem/infrastructure construction.
Price Action and Market Shifts
Quick historic overview
Here is a brief history of highs and lows of bitcoin prices, as compiled by colleagues at U.today:
- At the beginning of its journey, Bitcoin was worth less than $1.
- The first peak was a mark of $30 in July 2011, followed by a fall to $4.
- In mid-2013, Bitcoin broke through the price of $200 but rolled back to $120.
- An important point was the end of 2013 when the price raised to $1,100. However, the next 2 years were a solid drop for Bitcoin. The bottom was a mark of $240.
- The turn happened at the end of 2015, then the stable growth of the coin began. It lasted until the end of 2017 when the price reached a historic high of $20,000.
- The entire 2018 was marked by a tremendous fall. Any analysis and forecast turned out to be wrong. Bitcoin reached the bottom of $3,200.
- In 2019, new cycle of growth began, and the price exceeded $5,000 again.
Since the start of 2019, bitcoin is clearly most profitable asset class, as indicated by Binance Research.
Before we move to the predictions given by a broad range of experts and analysts, just a quick commentary on the huge event we are just living through that impacts all fragments of our lives – bitcoin and cryptocurrency included.
With the latest development in the world and the impending worldwide economic crash, bitcoin failed to decouple itself from traditional markets and lost 40% in one day.
The rest of the market slumped in an even harsher fashion, losing 50%+ in one day. Since this is a black swan event, an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences, there is no one who can legitimately claim that he or his algorithm can predict short-term price developments for anything, let alone cryptocurrencies.
Many experts agree that it will get worse before it gets better, both in terms of human health and economic situation.
We can only speak in very general terms and make a forecast that cryptocurrencies will probably drop below even the 2018 lows (many of the altcoins will most probably dip to unprecedented depths and record new all time lows).
Once this tough situation passes, a crazy bull run is what we all hope for and probability for such development is pretty high.
Market Prediction For Bitcoin Price:
Everybody and their mother made a bitcoin prediction for this and upcoming years. Not everyone’s opinion should concern us, but some forecasts are more valuable than others so we will pick out the most relevant ones below.
Let’s take a look at some of these Bitcoin predictions.
John McAfee Bitcoin Price Prediction – $1 million by 2020
John McAfee, the eccentric founder of the popular security software and a controversial Bitcoin follower predicted that Bitcoin will hit $1 million by 2020. He also added his own flair to the whole prediction betting to eat his male parts should he fail to be true. He subsequently relativized his bet and you can read more about it here.
The founder of Woobull.com predicted a bearish momentum in Bitcoin’s price as we head into Q2 2019. Willy expected the price of Bitcoin to bottom in the months of the second part of the year (sort of happened) before entering an accumulation period for the rest of the year.
“All our blockchain indicators remain bearish. NVT, NVTS, MVRV, BNM, NVM. They are experimental but have served to make very correct calls to date, even when traditional on-exchange indicators were reading to the contrary.” – Willy Woo
The billionaire made his predictions on the price of Bitcoin late last year stating the coin could reach highs of $10,000 by the end of March (missed on this one) and cross its ATH price of $20,000 by the end of the year. The Galaxy Digital founder believes institutional investment from firms such as Fidelity and Bakkt will be key to the surge in BTC’s price.
Fundstrat’s Sam Doctor and Tom Lee Bitcoin Price Prediction
Tom Lee, co-founder and head of research of Fundstrat, believes that the break-even point of mining 1 BTC directly correlates with the price of the cryptocurrency.
Tom Lee stated that the BTC fair value is much higher than the current price. The current fair value is somewhere between $13,800 and $14,800 which he believes might increase and reach $150,000 per coin as soon as bitcoin wallets account for seven percent of 4.5 billion Visa’s holders.
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Zhao Dong Bitcoin Price Prediction
Zhao Dong, one of the biggest Bitcoin OTC traders in China and an influencer recently predicted that Bitcoin might reach $50,000 by 2021. He reiterated that now is the best time to invest in BTC and said that you might get a yield of 100 to 200% over 3 years if you invest now.
Anthony Pompliano Bitcoin Price Prediction
In a recent tweet, Anthony Pompliano, founder of Morgan Creek said that Bitcoin isn’t going anywhere. He stated that BTC might go as low as $3000, after which it will continue being bullish starting from 2019. He enunciated that there is no reason to freak out on the declining price as Bitcoin’s fundamentals are becoming stronger.
Murad Mahmudov, host of ‘On The Record’, believes that Bitcoin will hit a new all time high sometime in late 2020. Prominent crypto personality and analyst Tone Vays generally agreed in an interview with this statement, adding that there is a 40% chance of seeing a new all time high in 2020. This percentage increases to 45% for 2021.
Wheatley model: $2,352.03
According to a Forbes article, the Wheatley model predicts Bitcoin will be trading at a rather bearish $2,352.03 in 2020. The article explains that the Wheatley model focuses solely on Bitcoin’s demand and also notes that Wheatly and researchers gave a far lower total market cap to bitcoin than the actual cap is ($20 billion is the figure used in their estimation model). Bitcoin’s slow demand growth is why its 2020 price prediction is so low.
Hayes model: $55,931.60
The Hayes model on the other hand predicts a much more bullish trading price for BTC in 2020. This is because that while the Wheatley model focuses on Bitcoin’s demand, the Hayes model focuses on its supply. Bitcoin’s supply is expected to slow as it approaches its supply cap, which should drive up prices.
Nexo Founder, Antoni Trenchev BTC prediction – $50,000
Nexo co-founder Antoni Trenchev told Bloomberg why he thinks the Bitcoin price could continue to go up to the $50,000 mark in 2020.
“I think that, very easily, we could see Bitcoin going up to $50,000 by the end of this year,” said Trenchev.
Trenchev’s Nexo platform allows users to borrow fiat currency against their cryptocurrency holdings. According to Nexo’s researchers and analysts, a massive rise in the Bitcoin price could occur due to the upcoming halving event. A halving event in Bitcoin is when the amount of Bitcoin generated by the network roughly every ten minutes is cut in half. This event takes place about every four years.
“The last time this happened, Bitcoin rallied 4,000%,” noted Trenchev.
FAQs On Bitcoin Price Prediction
1. Will Bitcoin go up in value?
Depends on who you ask. Crypto enthusiasts definitely believe so and considering that the number of “crypto infected people” is growing by day, it is very likely that bitcoin will go up in value in the coming years.
Why is bitcoin going down?
Bitcoin is publicly traded commodity/currency, available for buy and sell orders non-stop and depending on the market forces, both internal and external – its price swings both upwards and downwards. However, overall long-term trend is positive and all price plunges are relatively short-lived.
Why is bitcoin going up?
Because it is being considered as a safe haven against traditional financial instruments and the number of people who believe so is expanding. And since any kind of money has value just because people ascribe it, bitcoin’s value keeps growing proportionally to the number of people who see it as valuable.
Is it smart to invest in Bitcoin?
It depends on your investing profile, are you a long term or short term investor. Regardless of your investing affinities, it is highly recommended for you to do thorough research before making any investment decisions.
Can Bitcoin hit a million?
Anything is possible but the probability is what separates realistic from dreamy scenarios. If bitcoin does reach $1 million per coin, that would mean complete crash of the current economic order and an utter paradigm shift in people’s perception of economy and financial systems.
Can Bitcoin be exchanged for real money?
Of course – you can exchange it on various crypto to fiat exchanges or sell it face-to-face to someone who is willing to pay you.
What will Bitcoin be worth in 2020?
According to some analysts, Bitcoin might reach $23,500 by 2020 end.
What was Bitcoin’s lowest price?
The lowest price recorded was in October 2010, when Bitcoin was just starting out and was worth less than a dollar and cost $0.125, and in 2011February to April, it was trading at $1.00.
What will be Bitcoin’s worth in 2030?
Number of price prediction analysis that see Bitcoin rocket way above $50,000 by 2030 is increasing.
Can Bitcoin be converted into cash?
Yes, either on crypto ATMs or buy selling it on exchanges and then withdrawing to your bank account.
Is Bitcoin safe and legal?
Bitcoin is yet to be regulated in most parts of the world but stories about positive legal frameworks developed around bitcoin and crypto are popping out with increasing frequency. It is not illegal, with exemption of couple of fringe world countries.
How do I start buying Bitcoins?
You can go here directly to start buying Bitcoins.
Freelance journalist Ian Edwards wrote an excellent piece on bitcoin protocol improvements that you can read here. Here is the excerpt with most important developments. It is worth noting that prolific bitcoin developer Pieter Wuille unveiled two Bitcoin Improvement Proposals (BIP) on May 6th that offer plans that could prove foundational to a possible upgrade to the cryptocurrency.
Wuille’s first BIP describes a “new SegWit version 1 output type, with spending rules based on Taproot, Schnorr signatures, and Merkle branches.”
While the second describes “the semantics of the initial scripting system under bip-taproot.”
Below are most important protocol developments which are being worked on right now, with no firm deadlines when will they get implemented.
MAST, short for Merkelized Abstract Syntax Trees, proposes to improve Bitcoin by changing how smart contracts are written to the blockchain. In effect, it allows smart contracts to be split into their individual parts. This has several benefits in terms of privacy, transaction size and allowing for larger smart contracts. There are excellent articles about MAST here, here and here. There is no set timeline for its implementation.
Schnorr signatures, named after their inventor, Claus-Peter Schnorr, are a proposal to replace Bitcoin’s current digital signature algorithm (ECDSA) for a more efficient one. The first way they will improve the bitcoin protocol is that they will allow for the aggregation of multiple transaction signatures into a single signature.
This would make transaction sizes smaller in these types of transactions, and could reduce transaction’s use of storage and bandwidth of the Bitcoin network by around 25%. Second, Schnorr signatures would increase of the privacy of multisig transactions by aggregating signatures in these transactions, thereby masking the original signatures.
Bulletproofs promise to improve the privacy of Bitcoin by concealing quantities of transactions, while still leaving the sender’s and reciever’s wallet addresses public. They are already implemented on Monero while Bitcoin implementation is still pending and according to Wuille ” “far too premature to propose for inclusion into Bitcoin.”
Confidential Transactions (CT) would keep the amounts of Bitcoin transactions visible only to participants in the transaction.
Sidechains are intended to allow other blockchains to connect to the Bitcoin network using a separate coin that is tied to bitcoin. This means that each sidechain is a separate blockchain that can have different rules from the Bitcoin mainnet while still remaining connected to it. There are several different sidechain proposals under development currently: Liquid Network, RSK and Drivechain.
Liquid is a private sidechain, so there is some control over who can access it. The benefits of Liquid are that it allows instant transactions, privacy (Confidential Transactions are built in) and the ability for users to hold Liquid funds outside of an exchange.
RSK is a sidechain that plans to bring smart contract functionality and near instant payments to the bitcoin network. Like Liquid, it uses a federated system, with custodians tracking the movement of bitcoin between RSK’s network and Bitcoin’s mainnet. It does this by using a token called SBTC (smart bitcoin), which is pegged to BTC at a 1:1 ratio.
Drivechain plans to allow for multiple blockchains to be linked up to Bitcoin’s mainnet. Like RSK, Drivechain sidechains built can be secured by Bitcoin miners using merged mining. Unlike RSK, Drivechain is flexible, and developers could create sidechains tailored to the specifications they want, such as larger block sizes or privacy features.
Mimblewimble is a proposal for a bitcoin-like blockchain which claims to provide higher security than the current Bitcoin protocol, improved scalability, a different kind of cryptographic security and ASIC-resistant mining algorithm to encourage mining decentralization.
Of course, there is the highly contentious Lightning Network project, the long awaited layer 2 scaling solution that bears a lot of bitcoiners’ hopes and attracts a lot of disputes and detraction from other camps, mostly from bitcoin forks like BCH and BSV.
Lightning Network, has seen significant growth last year. The first Lightning implementation developed by Lightning Labs launched in beta in March 2018.
In a little over a year since being live on mainnet, there are now nearly 4,300 nodes with active channels and about 38,000 total channels. The steeper node growth in the last three months could potentially be connected to the release of the Casa Lightning Node, which made running a node significantly easier for a regular non-technical user.
It’s also worth pointing out that the average number of channels per node has been steadily increasing throughout the last year. Also the capacity of nodes and overall network has been increasing over the last year to the current 1,079 BTC (more than $6m) locked up in nodes and channels.
Ecosystem and Infrastructure
It’s no secret that one of the impediments to institutional investors entering the crypto space is the need for a suitable regulatory framework; hedge funds can’t simply invest their clients’ funds in the same free-and-easy manner as a retail investor.
Regulation is not a crypto killer. Regulation will provide much-needed clarity to investors big and small, as well as the entities issuing the coins themselves. People can start to focus on how these assets can best be leveraged to diversify portfolios, transfer money overseas, and improve business models, instead of looking over their shoulders in fear of running afoul of the SEC. With increased regulation, increased adoption will follow, particularly among those for whom due diligence is paramount. Financial institutions will be able to confidently bring these investment options to their clients, pension funds can incorporate cryptocurrencies into their long-term holdings — the applications are endless.
Jack Dorsey is the CEO of Twitter and has been showing its support for Bitcoin (BTC) and the Lightning Network .
Steve Wozniak is known for co-founding Apple, one of the largest companies in the world. Wozniak said that Bitcoin will become the world’s currency.
There is another Bitcoin bull in the market, Peter Thiel. The venture capitalist has already bet on Bitcoin and the possibility for it to become a gold-like safe haven. During a conversation with CNBC, he said that he would be long Bitcoin and neutral of everything else.
Tim Draper, a recognized venture capital investor, has been participating in the crypto market for a very long time. He invested in Bitcoin when it was traded under $1,000 and it has also made very bullish predictions for the future of this digital asset.
Ashton Kutcher has been an outspoken advocate for Bitcoin and he invested in a sports betting blockchain, UnikoinGold, along with billionaire, Mark Cuban.
Joe Rogan said that he is fascinated by the idea, but haven’t given bitcoin his full attention, but he thinks it could really shake up the global economy.
The current sentiment in the Bitcoin community is positive and technical improvements along with overall ecosystem growth are foretelling a bright future going forward. The technical indicators are signaling an upcoming bullish run and with more people understanding the unique features and advantages of bitcoin over traditional system. While past performance is not a great indicator for future price, the fundamentals underlying Bitcoin may well see it soar in the near future to $20,000 USD crossing its all-time high price.