How much will Bitcoin cost: forecast for 2020
Bitcoin was perhaps the hottest investment offer of all time. Once it was possible to buy it for mere pennies. What now? In 2017, the price of one coin broke a record and cost $ 20,000, but was subsequently adjusted by the market. Nevertheless, some people believe that it is too late to buy bitcoin and further investment will not make sense. However, a more in-depth study of the issue shows that bitcoin is just starting to gain momentum. Consider a few fundamental factors indicating that cryptocurrency will continue to grow in the future.
What causes the growth of bitcoin
To highlight the advantages of investing in bitcoin, it is important to analyze the main factors of its growth in the coming weeks, months and years. Bitcoin differs from classic currencies in that it was designed to grow in value, and not vice versa. Understanding what this means is important for investing in cryptocurrency.
You probably know that the amount of bitcoins that can be mined is limited to 21 million. While governments print new money when they like it, the amount of new bitcoins entering the market is tightly controlled and has a strict limit.
In addition to the fact that the total number of bitcoins is limited, the entry into the market of new coins is slowing down, as their mining becomes more and more difficult. Once it was possible to mine on your home computer and get 50+ bitcoins. Now, in order to create a block, you will either have to join mining pools by linking the power of your personal computer with other computers, or buy expensive specialized mining equipment.
The amount received for creating a block of bitcoins is reduced by about half every four years. Until the end of November 2012, the reward for the found block was 50 bitcoins. Over the 9 years of the existence of bitcoin, this indicator decreased by 4 times – to 12.5 bitcoins. Below you can see how the block reward has decreased in recent years:
- From 2009 to 2012 – 50 BTC.
- From 2012 to 2016 – 25 BTC.
- From 2016 to the current time – 12.5 BTC.
According to estimates, in 2020, miners will be able to receive only 6.25 bitcoins.
This is perhaps the most important point in terms of investing. The creator of bitcoin Satoshi Nakamoto believed that due to the reduction in the number of new bitcoins entering the market, the value of the coin will only increase, unlike national currencies, which are undergoing constant depreciation.
Since its inception, the price of bitcoin has been constantly growing. At the end of 2013, it hit the $ 1,000 mark and then plummeted. Bitcoin has been overestimated due to speculation that may arise in all financial markets.
Often, rising prices can cause a kind of avalanche. You probably noticed that when people see a price increase, they begin to buy more actively, fearing even more expensive prices. This creates massive hysteria. Prices in this scenario can be artificially inflated.
Bitcoin was revalued in 2013, so its price has been adjusted by the market. When prices rise quickly in a short period of time, you need to be careful with investing. It doesn’t matter whether you buy stocks, real estate, bitcoins or anything else.
Do not forget about the hype. In 2013, there was a lot of hype around Bitcoin and a large number of new users joined the Bitcoin community. At that time, bitcoin was in all the news, large companies were just beginning to realize the limitless possibilities of cryptocurrency, and famous people began to talk about it and attract attention to it. Such excitement stimulates demand, and rising demand entails higher prices.
Recently, stock markets have been extremely turbulent. If they suffer, investing in bitcoin can ensure the safety of funds. When crises occur in stock markets, people lose faith in financial systems and even national currencies and panic begins. For example, in 2008, gold prices rose because people invested their money in gold and other physical assets instead of investing in stocks or currencies.
Big ups and downs of bitcoin
Throughout the history of its existence, there have been several cases where Bitcoin lost more than 40% of its value. However, he always recovered afterwards:
- June – November 2011: from $ 32 to $ 2 (–94%)
- June 2012: from $ 7 to $ 4 (–36%)
- April 2013: from $ 266 to $ 54 (–79%)
- November 2013 – January 2015: from $ 1166 to $ 170 (–87%)
- September 2017: from $ 5,000 to $ 2,972 (–40%)
- January 2018: from $ 19,000 to $ 7,600 (–60%)
Tom Lee, one of the top Wall Street cryptocurrency researchers and co-founder of Fundstrat Global Advisors, believes that Bitcoin will cost $ 25,000 in 2020 and reach $ 55,000 by 2022.
Another expert and crypto investor, Petros Anagnostu, the founder of the Crypto Solutions consulting agency and the ICO Timeline information portal, believes that bitcoin is waiting for an incredible leap: by the end of 2020, you can expect a value from $ 50,000 to $ 100,000 for one bitcoin.
Daniel Harrison, editor of Coinspeaker portal and blockchain consultant at a presentation in 2014 said that bitcoin will reach $ 2,400 in 2017. His new forecast is quite bold: by 2020, bitcoin will cost $ 30,000. According to Daniel, three factors affect the price of bitcoin : consumer (gross network) value, parity / issue value and investment value.
John McAfee, founder of McAfee, a well-known antivirus software company, plans to go around with his bitcoins until at least 2020. According to his calculations, the profit will definitely be at least 100% and can reach a maximum of 2400%. In addition, John believes that at the time of the extraction of the last bitcoin, its value will amount to hundreds of millions of dollars.
But the boldest forecast, perhaps, was voiced by Jameson Lopp, an engineer, author of articles about cryptocurrencies and creator of the Satoshi.Info online scoreboard. Lopp believes that by 2020, Bitcoin will cost $ 250,000. This number was obtained by tracking the daily change in bitcoin prices for 7 years (with the exception of 2014, which was affected by the fall of the Mt. Gox exchange). According to Lopp’s calculations, Bitcoin has been continuously showing a daily increase in value since 2010.
It is difficult to predict the future, but one thing is certain: if the stock markets suffer in the near future (which is very likely), bitcoin prices as an alternative currency may skyrocket. Most likely, the cost of bitcoin will continue to grow continuously, and every investor should take this into account in order to invest their money in bitcoins on time and increase capital by 2020.