Why Popular 2018 End of Year Bitcoin (BTC) Price Predictions Are No Longer Valid
With the Holiday season in high gear, we have less than 3 weeks till we usher in the new year of 2019. Many individuals across the globe are probably decorating their Christmas trees and planning on how they will meet up with loved ones in the next few days as well as for New Year’s celebrations. Many crypto traders and enthusiasts, had hoped that by the end of 2018, Bitcoin (BTC) and other popular cryptocurrencies, would have increased in value and made their Holiday celebrations much better.
Along the year, we saw prominent Bitcoin analysts predict the value of BTC by the end of the year. Several price predictions were provided, but let us recap on two.
Thomas Lee – the Fundstrat CEO had initially predicted back in July that BTC would be at $25,000 by the end of the year. Mr. Lee stuck to his guns for quite some time. However, he recently reduced that prediction to $15,000 by the end of the year
Anthony Pampliano – the Founder and Partner at Morgan Creek had earlier on in the year predicted that BTC could make it to $50,000
What Went Wrong?
Most of the Bitcoin price predictions of 2018 were based on the fact that the digital asset had pulled off an impressive fourth quarter in 2017 when it peaked at $20,000. The predictions were also based on the assumption that institutional investors from Wall Street would get into the industry with new capital.
However, this year has been riddled with events that have continually dealt blows to the value of BTC and the entire crypto market. One can pinpoint the beginning of the severe stages of the bear market to the fake news that Goldman Sachs was dropping plans of a crypto trading desk.
The Goldman Sachs rumors first appeared in early September when BTC was valued at $7,300. The digital asset has since been affected by the delay of Bakkt, the SEC also postponing their decision on the VanEck ETF and the Hash Wars. The latter event had not been anticipated to last long or affect the value of BTC and all other digital assets as it did.
But Can We Really Predict the Future of Any Asset?
Charts can only predict a few hours or days into the future. But when events happen that were initially not factored into the calculations, we find that charts no longer assist as much.
Lou Kerner, Partner at Crypto Oracle, compares this to how we cannot predict the weather too far into the future:
While meteorologists can forecast one day out pretty well, by 10 days out, the variance is pretty significant…
The weather in a month can’t accurately be predicted because that forecast has to take into account a number of large-scale phenomena, each of which is governed by multiple variables and factors.
Where Is the Price of Bitcoin Going?
Mr. Kerner continues to admit that he too does not know the exact direction of BTC in the coming days or months. He however gives three possibilities of its future.
Bitcoin fails as a store of value — In this case, I think Bitcoin is toast
It surpasses gold as a store of value — In this case, with the total amount of gold bullion currently at about 2.5B ounces, and gold bullion market cap at $3.1 trillion, each Bitcoin will be worth north of $145,000
Bitcoin takes second place as a store of value — Silver is broadly considered to be #2 player in terms of stored value. There is currently about 4.0 billion ounces of silver bullion, for a total market cap of $58 billion, which would result in a price for Bitcoin today of $3,346. Bitcoin currently has a market cap of $62 billion
Summing it up, this year has seen lots of BTC end-of-year price predictions that have not been validated with time. With 3 weeks left in the year, the reality is that it is highly unlikely for BTC to reach those values. Price predictions that far into the future fail to consider multiple factors and events that might happen with time. This then leads us to conclude that we can only perhaps predict the value of assets only a few days into the future in a manner similar to how meteorologists forecast the weather.
What are your thoughts on the numerous price predictions we have had in 2018? Should we stop providing End of Year Price predictions for all digital assets? Please let us know in the comment section below.