Bitcoin has posted its best start-of-the-year numbers since 2012. With doubt lingering into 2019, after hopes for the crypto-goldrush plummeted in late 2018, investor optimism has suddenly been reignited. Economists and financial talking heads are wasting no time weighing with their 2020 predictions. The forecast looks promising. Are they right?
Well in fact, just two weeks before the market surge, on the eve of the new year, PYMNTS Media
had posted a prediction and a video that stated in part, according to Bloomberg
Bitcoin investors are in for a halving event that could potentially give their currency a big boost in 2020…
Then, Antoni Trenchev, co-founder of Nexo, made an even bolder statement when he appeared on Bloomberg TV just a few days later on January 3rd, 2020.
Bloomberg teased his appearance with this headline: “Bitcoin Could Go to $50,000 by End of 2020, Says Nexo’s Trenchev”.
But with the rush to invest again, is it a fluke? Is it all pie-in-the-sky thinking which will eventually lead to a catastrophic fall-out the likes of which haven’t been seen since the market crash in the 20s? Are we all expecting another goldrush cash-in, only to crash inexorably? No, not this time. Not according to Bitcoinist.com, who is predicting big growth by year’s end. Said
writer, Martin Young, in a January 17th
article titled, Bitcoin Could Hit $70,000 by the End of 2020
There has been no pullback since crypto markets erupted a couple of days ago and bitcoin is holding its gains. For the past few hours BTC has been trading just below $8,700 but it started to move again topping $8,800 as it reaches resistance. SIN/HK up roughly 21% so far this year.
Some warn, “hold on” pointing to the 2018 dip. Certainly, any bitcoin investor remembers that. There was great promise in 2017 when bitcoin hit a record high of 20,000 by December 2017. Many rushed in at that time. But it plummeted to little over $3,000 by the following December. So, it stands to reason that many investors are playing the market this time, with slightly sweaty palms. However, say the experts, there’s no need. The 2018 debacle was Bitcoin’s bottom. And, Bitcoin did climb steadily throughout 2019. Still, others say there is cause for concern. With a political climate and other catalysts shaking up the market, things are bound to remain a tad uncertain. But Jehan Chu, co-founder of Kenetic Capital, told CNBC
that the “Iran uncertainty combined with the positive launch of CME Bitcoin Options” were actually strong drivers of the surge.
Current geopolitical tensions between Iran and the U.S. as well as exchange-traded bitcoin options which launched Monday on the Chicago Mercantile Exchange offer a way for institutional investors to invest and with sentiment [driving] volatility, we are seeing increasing institutional volume anchoring the market.
Economists are also pointing to May when a “halving” event will take place. “Halving”, as mentioned earlier in the PYMENT video, is the most notable “but” in the equation when discussing the potential for 2020. “Halving” occurs every four years and is part of the underlying code of bitcoin. Essentially, in layman’s terms, halving cuts the supply of new bitcoins in half dramatically impacting the price. What happens when supply is limited? Often demand goes up because its value increases.
Given the history of bitcoin --- in that previous halving events, have preceded price surges in bitcoin --- and with a halving event taking place halfway through the year, analysts are paying close attention.
While most average investors know nothing of “halving”, once any product’s price starts to rocket up, investors, even curious, uneducated, bitcoin enthusiasts, start to buy in. Like anything gaining in popularity, when the mainstream takes notice, the masses follow.
Vijay Ayyar, head of Asia for cryptocurrency exchange Luno, told CNBC
…a $15,000 to $16,000 price on bitcoin is a ‘reasonable target’ by year end.
So, what do you think about this prediction? Do you concur? Is bitcoin likely to hit $16,000 by the end of 2020? Or, in your opinion, is it all foolish conjecture, a fool’s gold prediction, wishful thinking?
Weigh in with your thoughts. We want to hear!