- By Pierre-Alexandre
October 16th, 2019
Entering into the last quarter of 2019, investors and analysts are eager to know what can be the journey for Bitcoin in 2020.
Hey are some key drivers and debated price predictions for Bitcoin, as while celebrating the 10 year anniversary of the King of Cryptocurrencies, 2019 has also been a critical year for Institutional adoption.
Last edit: 10/16/19.
We have just entered into the fourth and final quarter for 2019, and crypto enthusiasts are eagerly watching every movement of the world’s largest cryptocurrency, Bitcoin. So far, Bitcoin’s performance in the Q4 has remained on a flat note as the BTC price hovers around $8200-$8300 levels.
Analysts have been hunting different plausible reasons for the Bitcoin price movement as enthusiasts are already talking about the Bitcoin price predictions for 2020.
But before we proceed to look into Bitcoin’s future let’s look at its performance this year. Maybe the Bitcoin’s price movement this year could set an important foundation for its upcoming journey.
Bitcoin Performance In The First Three Quarters of 2019
The year of 2018 was the year of massive correction wherein Bitcoin price corrected more than 80% by the year-end. With regulatory uncertainty and multiple Bitcoin scams evolving, the crypto-winter of 2018 proved to be a rough period for Bitcoin investors.
- This year 2019 started on a pretty low note! With the U.S. government shutdown and the regulatory inaction, the first quarter Q1 2019 proved to be a quarter of no performance as Bitcoin ended it almost on a flat note around $4000 levels.
- The start of the second quarter from April 1 was pretty powerful as the dice started rolling! In the second quarter, Bitcoin saw a massive surge from $4000 to reaching above $11,200 levels by June end. A massive 180% gain in just a span of three months!
- The third-quarter Q3 has remained more or less volatile until the last month of September which saw Bitcoin losing its steam and falling 20% in just the last two weeks of the month.
Below is the Omenics’ Sentscore chart that shows that Bitcoin price performance for the first three quarters. If we put the Sentscore against the BTC price, we can see that the overall market sentiment for Bitcoin has remained positive above 6 for a majority of the time, but then a reverse trend appeared between the 18th and 26th of September.
The Buzz score seems to have bottomed around the 18th of September. Our analytics have recorded a very low level of interest for Bitcoin mid September:
The technical score is also heading on a downtrend direction:
Traders Analysing the Bitcoin Performance Ahead
Traders continue to maintain the stand that the Bitcoin price will remain volatile in the short-term. They further add that these short-term swings will set the tone for long-term price movement.
Popular trader Josh roger, tweeted that the good news is that Bitcoin price has crossed the 20-day moving average (DMA).
$BTC - with three weeks of sideways and the bbands starting to pinch, Bitcoin price could see some volatility soon— Josh Rager 📈 (@Josh_Rager) October 13, 2019
Good news is the price is above the 20-day MA for the first time in a month pic.twitter.com/vm0b5DHiA1
Another Bitcoin trader, Big Chonis stated that Bitcoin has formed a Bullish EMA cross which will allow its to surpass multiple resistance levels.
$BTC - GOOD MORNING #BITCOIN— Big Chonis⚔️Flux Trading Group🚀 (@BigChonis) October 13, 2019
First EMA Bull cross on the 1hr chart since the breakdown a couple days ago...still a ways to go to test higher resistance levels...Weekly candle closes tonight... 38.2 current resistance pic.twitter.com/brRQ1MP1Hu
Another popular crypto analyst Jack Trader says that Bitcoin can still fall from the current levels and make a new bottom at $7400 levels. From there, he expects Bitcoin to skyrocket ahead.
I think this is the most likely scenario for $BTC— Bitcoin 𝕵ack (@BTC_JackSparrow) September 7, 2019
Bleed our way to 7.4K in a falling wedge bottom in early November
From there we push in to breakout and throttle full force, making our way back above $10K late November or in December and set course for near ATH towards halving pic.twitter.com/j5lXXkuqYT
Although Bitcoin investors seem to be jittery at this stage, the cryptocurrency is still the most profitable investment so far in 2019. Even at today’s price, Bitcoin has given over 100% returns to investors this year alone. On the other hand, Gold, stocks and bonds come nowhere close with their returns lying between 10-25% only.
This is one reason besides many others as to why Bitcoin continues to be one of the most preferred investments as on date. But let us take a look at some of the factors that could drive the Bitcoin price movement in 2020.
Bitcoin Price Drivers for 2020
- The worsening global economic condition. Yes, we all know that in the last few months, the global economy is shaping up badly with goring uncertainties across the globe. The U.S. debt has turned a massive 20plus trillion dollars raising the chances for a recession.
The long-going trade war between the U.S. and China has created enough pessimism in the global market slowing down demand. On the other hand, Europe and the United Kingdom are failing to rise above their own concerns of the stagnating economy and the Brexit.
In case of a global economic recession, investors are expected to use Bitcoin as a potential hedge.
- The Bitcoin halving event in May 2020 is likely considered as a potential booster to the Bitcoin price. Halving is an event that occurs every four years and wherein the miners’ rewards are reduced to half. In the next Bitcoin halving miner rewards to be halved from 12.5 BTC at present to 6.25 BTC after halving.
Historical chart patterns show that BTC price has been shooting northwards a year before and after the halving. Thus, it could be a major booster to the BTC price going ahead.
- Store of Value! The total number of Bitcoins in the market is limited to 21 million. Out of this, nearly 85% or 18 million Bitcoins have been mined as per the data by BitcoinBlockHalf. It is clear that we are slowly getting closer to the time when all Bitcoins shall be completely mined.
This limited supply is likely to push Bitcoin price higher going further, as per crypto industry experts. Furthermore, there is another fact that out of the 18 million mined BTC tokens, not all are currently in circulation. This is because, over the last few years, several Bitcoins were lost due to loss of wallet keys and passwords, hacks, and other reasons.
This has further resulted in limiting the supply for Bitcoin. As the demand for the world’s largest cryptocurrency continues to grow, it can serve as a good store of value.
- Institutional Participation: Although the entry of institutional players in the crypto market is slow, it still continues to grow with time. Moreover, institutional players are inclined more towards Bitcoin due to its several derivative products available in the market.
Chicago-based CME Group witnessed a major surge in popularity of its Bitcoin Futures contracts in the last quarter, on a Q-o-Q basis. “Institutional flow remained strong, with 454 new accounts added, compared with 231 added in the third quarter of 2018,” CME said.
Last month, ICE’s Bakkt launched its Bitcoin futures contracts in the market along with its custodial and warehousing solution. Although the initial response to Bakkt’s Bitcoin futures offering was lukewarm, it is slowly catching up with the demand.
Daily summary of Wednesday's Bakkt Bitcoin Monthly Futures:— Bakkt Volume Bot (@BakktBot) October 10, 2019
💸 Traded contracts: 224 (+796%) (New ATH 🚀)
📈 Day before: 25
🚀 New all time high: 224
Follow @BakktBot for realtime updates. pic.twitter.com/gd7nu1GndG
There are also other big names like Fidelity Investments working for Bitcoin-based institutional products.
- Ability to withstand regulatory hurdles! This is one of the most important qualities of Bitcoin which is loved by its investors. Over the last two years of a massive regulatory crackdown on the crypto markets, Bitcoin has been able to weather several tough occasions.
The U.S. regulators have clarified that Bitcoin is a ‘commodity’ and won’t fall under securities laws, unlike other cryptocurrencies that were brought to the market through ICO token-sale.
Moreover, there is evidence that the U.S. government tried to shut down Bitcoin back in 2012, but couldn’t find any success. During a recent interview with CNBC, cryptocurrency experts Katie Haun said that she was tasked with the project to pull down the Bitcoin network. This shows that Bitcoin has weathered tough storms over the last decade.
- Higher Network Capacity: With important developments like the Lightning Network, RSK, Drivechain, Bulletproofs, etc. the Bitcoin blockchain network is likely to get more robust, powerful, and privacy-oriented.
With higher network capacity, the Bitcoin network will be able to serve a large number of participants.
Bitcoin Price Prediction Report By German Bank BayernLB
A Munich-based banking giant Bayerische Landesbank (BayernLB) recently published a report on the Bitcoin price prediction for 2020.
The report, authored by senior analyst Manuel Andersch explains that Bitcoin has similar characteristics to gold. The author goes to predict the Bitcoin price for 2020 based on the stock-to-flow model.
The report states that “The stock-to-flow approach originating in commodity-market analysis serves to quantify the “hardness” of an asset”. It further adds that Gold managed to attain a high stock-to-flow ratio over the course of the millennia. On the other hand, Bitcoin has attained these high levels at a “breakneck” pace.
Andersch said: “Historically speaking, it has invariably been the commodity with the highest stock-to-flow ratio at that juncture which has been used as money because this enabled the best value transfer over time.”
The banking giant says that based on their logarithmic analysis and the correlation between the SF of a commodity and its market capitalization, Bitcoin will attain a fair value of $90,000 by the next halving event.
The BayernLB report mentions that “If the May 2020 stock-to-flow ratio for Bitcoin is factored into the model, a vertiginous price of around USD 90,000 emerges. This would imply that the forthcoming halving effect has hardly been priced into the current Bitcoin price of approximately USD 8,000”.
Bitcoin Price Prediction Based on Power-Law
While analysts and crypto experts continue to predict the future Bitcoin price based on several behavioural patterns, there often exists a wide gap between these predictions.
The Bitcoin price continues to move forward in cycles of rapid booms and busts. However, if we are to look into Bitcoin’s complete history of price evolution, it moves within a specific corridor defined by the ‘power laws’.
This model makes broad predictions highlighting the long term future of Bitcoin price. The two bold predictions done through the power-law-based Bitcoin price modelling include:
- the price will reach $100 000 per bitcoin no earlier than 2021 and no later than 2028. After 2028, the price will never drop below $100 000.
- the price will reach $1 000 000 per bitcoin no earlier than 2028 and no later than 2037. After 2037, the price will never drop below $1 000 000.
To understand more about how this pricing corridor has evolved and how the power-laws work, read this detailed article by Coinmonks.
Bitcoin Price Prediction 2020 By Crypto Experts
- John McAfee, the founder of McAfee security, has predicted $1 million for Bitcoin price by the end of next year, 2020. Although this might sound unrealistic to many, McAfee remains heavily bullish on his scarcity theory. He believes that the Bitcoin scarcity will trigger a FOMO driving its price exponentially higher.
During a recent interview with Forbes, he said: “Let’s get real, there are only 21 million bitcoins. Seven million of which have been lost forever, and then, if Satoshi [bitcoin’s anonymous creator] is dead, add a few more million”.
- Earlier this year, Fran Strajnar, CEO of crypto research firm Brave New Coin, said that Bitcoin price would hit $200,000 latest by the end of January 2020. In an interview with The Inverse, Strajner said: “The adoption rates are continuing to be quite steady, and adoption rates heavily correlate to the price, so therefore, unless for some reason people just simply stop continuing to adopt Bitcoin, we should see $200,000 per Bitcoin by 1st January 2020 at the latest”.
- China’s most-popular Bitcoin billionaire Zhao Dong has said that Bitcoin is all set to take-off in the next three months. In a Weibo post, Zhao wrote: “The next three months could be the last opportunity for bottom fishers, and after that, the crypto market will enter Spring and then Summer, estimated to rally together with China’s stock market in 2021. There’s always ups and downs, just like the cycle of the seasons.”
- Back in 2017 during an interview with Bloomberg, Ronnie Moas - founder and director of Standpoint Research - said that Bitcoin price will reach $50,000 by the end of 2020. His another bold prediction is that the overall cryptocurrency market cap will shoot to $2 trillion in the next ten years.
- Experts from the financial and the entrepreneurial space are more or less divided on the future of Bitcoin. On one hand we have big names like Jack Dorsey, Elon Musk, and Peter Thiel backing Bitcoin, on the other hand, we have Warren Buffett who has showered heavy criticism in the past.
Bitcoin Bulls:— Barry Silbert (@barrysilbert) February 28, 2019
What side are you on?
Note that these are just predictions made by independent experts based on their understanding of the market and the overall crypto industry. Investing in highly volatile assets like the Bitcoin comes at its own risk. Invest only what you can afford to loose.