Which Bitcoin Price Predictions Can You Trust?
After a steadily positive—and positively steady—summer, during which the Bitcoin price (BTC) sat at or above 10,000 USD for over three months, last week brought a sharp drop. Following a slow decline over the first few days of fall, the BTC price suddenly fell over 1,000 USD in the span of a couple of hours, dropping below the 9,000 USD mark and then later dropping below 8,000 USD.
Despite the massive tumble, Bitcoin price predictions remain strong. John McAfee, the PC virus detector turned crypto investor, said that he sees Bitcoin reaching the 500,000 USD mark by the end of next year. He recently amended that prediction and doubled it, now saying that the price will reach 1 million USD by the end of 2020. It’s a bold statement regarding an asset that is currently barely above 8,000 USD, and whose highest price so far was 20,000 USD, almost two years ago. Yet McAfee insists that the scarce nature of Bitcoin, the hard cap on its limit, and the fact that a good chunk of the Bitcoin out there is likely lost for good due to misplaced private keys.
McAfee isn’t alone in his bold Bitcoin price predictions though. While other analysts are more conservative, many of them are still betting big. McAfee himself says he supports Peter Brant’s prediction, which is that Bitcoin will drop down to 5,000 USD before skyrocketing. The German bank, Bayer LB, predicts that the price will reach 90,000 USD in advance of the halvening which will occur in May of next year. And Simon Peters, an analyst at eToro who predicted earlier this year that Bitcoin could hit 50,000 USD before the end of 2019, says this dip is simply a bump in the road and will spur investors to buy low, thereby pushing the price back up.
Of course on the other side of the (bit)coin, there are predictions that the BTC price will continue to drop. Peter Schiff thinks we’re headed toward 4,000 USD. And there have been no shortage of Bitcoin obituaries in cryptocurrency’s decade-long existence.
With so many conflicting predictions, how do you know which to trust? After all, if the BTC price is on its way to 1 million USD, then now is the time to buy. But if the Bitcoin price is heading down, then it’s better to hold off.
How to know which Bitcoin price predictions to trust
The short answer, unfortunately, is that you can’t know which Bitcoin price predictions to trust. While most analysts are basing their predictions on years of market experience and observations of known patterns, they’re still just guessing. Some of those guesses may be more educated than others, but you can’t really predict the market with complete accuracy. If you could, we’d all be rich.
There are, unfortunately, too many factors that go into the Bitcoin market. We’ve talked before about some of the factors that affect the market, which include hype; new products, features, and partnerships; and large-scale crimes, but many of those factors are unpredictable. You simply can’t know when someone will hack an exchange and steal billions of dollars worth of Bitcoin, when a Bitcoin whale will decide to move enough coins that it will shift the market, or whether the hype around a new product will actually come through. But there are some things you can do to make more educated guesses:
Read, read, and read some more. Familiarize yourself with market patterns, read the price analyses and see which predictions are most often correct, know which products and partnerships are coming out, read about them, and form your own opinions.
Take most things with a grain of salt. It’s no secret that people who speak loudly and optimistically about Bitcoin are often invested in Bitcoin. In other words, it’s in their own best interest for the Bitcoin price to go up. That’s not to say they’re wrong, it’s just important to remember that they’re not necessarily neutral.
Don’t be scared by sudden shifts. It may be tempting to sell off your entire Bitcoin investment each time the price drops by 1,000 USD in an hour, or to start buying aggressively when it spikes, but the big shifts are usually temporary. It’s impossible to time every dip and swell to buy and sell at the right time. Make a long-term plan and stick to it.
While at the end of the day, we won’t know for another year if John McAfee’s Bitcoin price prediction will come true, or if Peter Schiff’s will until the BTC price drops to 4,000 USD, educating yourself to the best of your ability will help you make your own best prediction.