These off the mark 2020 Bitcoin price forecasts show that projecting BTC value is as useless as collecting lottery numbers.
Pundits and crypto experts love to make Bitcoin (BTC) price forecasts, no matter how risky the asset class is.
In 2017, there were demands for BTC’s price to be $35,000–$50,000, and, of course, a few valiant souls expected that the price would increase to $1 million before it was corrected.
No one will forget how John McAfee infamously promised to chomp off his genitals if BTC’s price didn’t hit $1 million by 2020.
Although some of these high projections are based on fundamentals, others are totally unfounded. Irrespective of the reasoning of the analyst, a few of them are so far away from reality that they have become memes.
Let’s take a peek at the most scandalous Bitcoin price forecasts for 2020.
“Guesstimation” attracts attention because nobody follows them up
Guessing the potential price of cryptocurrencies is so ingrained in the culture that many observers might not even bother measuring their efficacy. Keeping up with the constant influx of forecasts on blogs, podcasts, Twitter and YouTube is almost difficult. Imagine the complexity and resources that would be required for a person to follow through on all these random guesses.
To further confuse matters, some of these forecasts come from well-known Bitcoin bashers, such as the popular Peter Schiff Gold Bug and New York University Stern School of Business Professor Nouriel Roubini. In certain cases, however, personal credential is often less relevant than operating empirical models.
A month before the March 12 collapse, which saw Bitcoin’s price fall from 50 percent to $3,750, PlanB.
creator of the stock-to-flow model stated that Bitcoin would not return below $8,200. At the time, no one predicted the Dow Jones Stock Index to experience the most important downturn since 1987, and neither the WTI’s potential oil contract will sink to a negative $40.
Despite the outlandish argument, PlanB would not be nominated for the worst forecasts of 2020 because barely everyone predicted the coronavirus pandemic to have an effect on the markets in a way that will cause absolute mayhem. In comparison, the famous graphist Peter Brandt also made the same mistake when he said the same thing that BTC would never revisit the sub-$6,000 level in January.
CryptoWhale’s quantum model calls for $24,000 BTC in mid-2022
On June 2, 2020, Twitter analyst CryptoWhale announced a new “quantum” concept that will forecast the price of Bitcoin. According to CryptoWhale, the model has “effectively predicted every major move since 2018.”
Things couldn’t have been worse, when the model expected both a $2,000 bottom in 2020 and a “appropriate bull run to $24,000” in mid-2022. Somehow, the quantum waves, ions, and atoms that were meant to make it more precise were pure heresy.
Two lessons to be learned from the “quantum model” are: (1) a lot of social network followers does not actually translate into improved price predictions, and (2) dynamic algorithms are vulnerable to the same mistakes as humans. Evaluating a new asset class during a time of desperate monetary easing by the central bank is far from straightforward.
Ross Ulbricht predicts nine months of downside after Black Thursday
In April, Ross Ulbricht, the founder of the now defunct Silk Road Darknet market, wrote that the instability of Bitcoin—especially the March 12 Bloodbath—would most likely lead to a bear market that could last three to nine months. At the point, Bitcoin was trading near $7,000 and was evidently already affected by the latest 50 percent intraday correction.
Precisely 17 days after that blog post, BTC soared over 30% to $9,000, thus completely invalidating Ulbricht’s analysis. To further show how far off that analysis was, Ulbricht added that a $14,000 bull run was “very unlikely.”
During Ulbricht’s so-called bear market time, Bitcoin’s prices increased by more than 300 per cent from December 2018 to June 2019. Moreover, calling for such a prolonged reversal does not fit Bitcoin’s historical data, since even in the darkest time of December 2019, Bitcoin’s price stayed more than 100 percent above the previous year’s lows.
Gavin Smith says Bitcoin will close 2020 at $7,000
During a July 27 interview with Forbes, Panxora CEO Gavin Smith said he predicted a $7,000 Bitcoin price by the end of the year. Gavin said, “This year, a short time before the real rally takes place.”
Panxora’s CEO clarified that, considering the appreciative trend of inflation hedges, the wider effect of the demand shock on the economy would theoretically push BTC down.
This prediction was made after 80 days of Bitcoin’s price consolidating to $9,500. At the point, despite rising 100 percent from mid-March lows, there was still some uncertainty about BTC’s potential to crack the $10,000 resistance.
Antoni Trenchev calls for $50,000 Bitcoin price in 2020
On Jan. 3, 2020, Nexo co-founder Antoni Trenchev stated that BTC could easily reach $50,000 in 2020.
Apart from an overly ambitious estimation, the logic behind it does not seem to suit. According to Trenchev, Bitcoin has become a “new gold” and pointed to the lack of correlation with conventional markets as a possible trigger.
As seen above, gold traded in parallel with conventional markets for the better part of 2020, but it should be remembered that these asset classes have differing degrees of uncertainty. As a consequence, equities oscillations tend to be even higher. However, the general trajectory of both markets remained very close until November.
This price movement creates an impossible challenge where BTC is supposed to behave as “new gold” while also showing a lack of connection. This prediction was doubly inaccurate in the absence of a wide margin for its year-end target and also in the inability to accurately estimate gold’s connection with conventional markets.
Now that Bitcoin’s price is just 7.4 per cent away from $30,000, it would be much more fascinating to see what sort of extravagant bullish and bearish price forecasts are given for 2021.
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