The Bitcoin price has seen some wild swings recently.
Prices rallied to $9,000 levels and then fell.
With so much of price volatility, a lot of attention is diverted to Bitcoin.
The question is, will such high prices sustain over the longer term?
The prediction is that prices may go up as high as 200% in just one year.
This is after the recent 300% rally in Bitcoin prices.
But most market players are questioning the sustainability.
Their fear is what if bitcoin prices crash?
Well, you must remember that the operation module of a Bitcoin is very different.
Unlike stocks or bonds, these are far more volatile.
Though investors are very excited about this space, they have to remember some basic facts.
- It does not operate like most conventional asset classes.
- There is a risk of many scammers and hackers attacking investors and exchanges.
- Gains from Bitcoins are liable to be taxed.
There is a school of investors who believe that Bitcoin is the next big trigger in the market.
But there are others who are convinced that it is perhaps the biggest bubble.
1. The Goldman Sachs View
In this context, let us analyze the prediction of some of the top brokerages and experts.
How is Goldman Sachs reading the Bitcoin price trend?
Despite the Bitcoin prices recovering after sliding to $6000, they sounded alarmed bells.
According to the expert here, most cryptocurrencies are likely to fall to zero.
Their contention is that the current iterations cannot be viable over long-term.
They consider these to be rather primitive.
Moreover, according to them, the transaction model is also flawed.
It is both expensive and time-consuming at the same instance.
But most importantly, cybersecurity issue is the biggest concern.
There are innumerable cases of hackers attacking a user account.
So the long-term viability is one of the most important worries at this juncture.
However, they have also highlighted a possibility of these evolving and surviving.
But the lack of appropriate intrinsic value is one of the major problem points.
Experts often use the dotcom bubble example from the late 1990s.
Many of early entrants like Pets.com and toys have vanished today.
But at the same time, you have the likes of Amazon taking giant leaps forward.
They feel something like this can be expected in the cryptocurrency space too.
If you take a look, there are very few companies that exist the way they began.
When we mention success stories like Amazon, this too saw significant evolution.
So, you can say that may be the biggest cryptocurrency winner is yet to be created.
But at the same time, the Bitcoin has every chance of slipping further.
It is all a matter of time and essentially a wait and watch game.
– The Need for Evolution
Therefore, Goldman clearly sees the need for urgent and meaningful evolution.
They feel the lack of a convincing player in the current scenario is a key factor to consider.
This also makes it quite risky to predict who the ultimate winner will be.
However that said, this is not a prediction on sharp price rise.
Even if this is a bubble, there is hundred percent chance of a price rise.
Experts feel that even a bubble expands, select players can see a distinct price rise.
It goes on to highlight the complex composition of the Bitcoin dynamics.
On the one hand, you have wild price swings.
On the other hand, there is every possibility that this product develops further.
As a result, a price prediction is a tricky business.
There is every chance that there is a huge escalation in prices.
But the road ahead for Bitcoin is difficult to predict.
However, in the current scenario, the risk proposition is very high.
Any prediction will be based on uncertain price moves.
It goes without saying that the Bitcoin market is very dynamic.
That means that you cannot completely rule away constructive changes.
In fact, it calls for a serious relook into future price prediction.
– The Key Metric Is Crucial
However, not everyone is that pessimistic.
Independent Bitcoin analysts like Ronnie Moas see some glimmer of hope.
They expect Bitcoin to reach $100,000 levels if they can maintain current market share.
This prediction is primarily based on the crucial Key Metric.
He goes on to point out that the sharp correction in Bitcoin prices was due to China.
There was the news that Chinese Government and Lloyd Bank may ban buying with credit cards.
But he feels that the current market share is the most important element.
He feels investors may use this current downtrend to increase market share.
He feels this can turn out to be an extremely profitable investment.
Large sums of gold, stocks and other investment resources may be redirected.
Just imagine close to $230 trillion is accumulated in stocks, bonds, gold, and cash.
What if this amount eventually found its way to Bitcoin?
I am sure you agree that the price is deeply dependent on the supply-demand ratio.
So, if you channelize even 2% of $230 trillion, you will be staring at a $4 trillion market.
This is the most important aspect of this price prediction.
So Moas insists that the pricing will be a function of the overall market share.
So at the current 36% market share, it can easily reach $100,000 price level.
Even if you see the recent high, it will provide you with some direction.
With just 36% market share in December, Bitcoin hit an all-time high of $19,535.70.
The math is out there for you to calculate if there is a greater market share.
At this rate, it is not difficult to fathom the $100,000 estimate.
– Diversify Your Portfolio
2018 is all about regulatory threats to the Bitcoin.
There have been threats from South Korea, China and a complete ban on Facebook.
Sentiment has taken a further beating with $500 m hack in Japan and the AriseBank scam.
All of these no doubt impacted sentiment a lot.
As Moas mentions, it is always a good idea to diversify the cryptocurrency.
In this way, you can preserve capital and limit losses as much as possible.
This is a fundamental requirement in any type of investment.
Be it gold, stocks, bonds or any other asset.
The principles of investment remain the same.
If you want to maximize your gains, you have to diversify your gains.
Imagine, will you make money if you only invested in small caps.
Aren’t there enough examples of small caps that go bust as well?
You also have a number of IPO scams.
But all of these never force you to stop investing in the stock market.
In many ways, the Bitcoin also reflects the similar sentiment.
So when you are predicting the price of Bitcoin, you have to consider all of these elements.
It is important to mobilize your Bitcoin investment in an appropriate way.
This is how you can make sure that this does not go hit zero.
Upswings and downturns are part of any investment cycle.
But if you want to come out of it unscathed, you have to undertake serious diversification.
Moreover, cryptocurrency as an asset class has to be seen in totality.
You cannot take a position on just Bitcoins in isolation.
It goes without saying that Bitcoins are the most popular of this tribe.
But any prediction about the prices will have to include the entire space.
2. Nouriel Roubini
It is important to take into consideration his views on this investment avenue.
Well, he predicts a crash in Bitcoin prices in future.
Roubini expects bitcoin prices to hit zero going forward.
With the US Congress addressing a hearing on this issue, this point of view is rather important.
Roubini has even warned investors to hold on for their dear life.
He expects severe selling in Bitcoin on the back of price volatility.
This is expected to lead to significant correction below the $6000 levels.
Bitcoins currently are close to the $5000 levels.
There is expectation of an even more serious correction going forward.
That is primarily the biggest concern as per Roubini.
He feels while scammers may sell out positions and book profit, genuine investors may get stuck.
According to Roubini, several techniques in Bitcoin trade are to be blamed as well.
Some traders use the ‘wash’ technique to push up prices.
This means that traders are buying and selling their own orders.
This is primarily done to push up prices.
As the price dips further, the fear is wash traders become more active.
For example, now that the prices are below the $5K mark, wash traders may try to push up rates.
The lack of regulatory move on this regard is a concern.
But if you pay heed to Roubini’s view, his call is a SELL on Bitcoin.
3. Coindesk Chief Silbert Predicts Crash in Bitcoin
Here is another influential view on the Bitcoin Prediction.
Often we believe that industry veterans have the best view.
This is because they are constantly going through the various ups and downs in the market.
That means they have the exact pulse of the industry dynamics.
So who better in this case than the Coindesk chief?
So what does the CEO of cryptocurrency holding company Digital Currency Group says?
Well, the bad news is he too warns investors about a potential crash.
Not just Bitcoin but also Ethereum and Zcrash are likely to crash as per Silbert.
His prognosis is based on the fact that most of these tokens don’t have actual utility.
Most of these are not very different from each other.
What may stand the test of time is perhaps digital gold.
He feels that this is perhaps the only counter that can see considerable appreciation.
He feels this is the only privacy-focused token.
However, he claims all this is simply a prediction about the long-term trend.
Nothing is going to happen overnight on this count.
Perhaps, in this case, he is looking at a 20-30 year timeline.
But you can also gauge the sentiment with the latest offerings from Coindesk.
Despite this long-term warning, they are investing in new tokens.
They are looking at new tokens like Civic, Blockstack, Colu, Unikoin Gold and many others.
This proves that despite the notes of caution, the immediate future looks promising.
Otherwise one of the best known Bitcoin Exchanges will not deploy resources for newer tokens.
Another interesting fact is that they also anticipate user demand.
Otherwise what will be the point in developing new currency?
As of now, Bitcoin on CoinMarketCap around $8300 is one of the most valuable cryptocurrency.
4. The ECB View
Now let us train our guns on the Bitcoin prediction by the ECB.
According to the European Central Bank, all cryptocurrencies are volatile.
Their prices are cardinally speculative in nature.
The question then is what kind of value you can ascribe to these AltCoins.
Well as the concerns about Bitcoin grow, the ECB is planning more regulation.
The ECB says that it is not advisable to ignore the threats posed by cryptocurrencies.
They feel if the bridge between virtual and real collapse, there will be a huge liquidity drain.
That can never be good news for global currencies.
While there is no clear prediction on price movement, there is an emphasis on information.
That alone is expected to safeguard real currency value for people.
They are worries that these virtual currencies can cause huge disruption.
The question now is how much will be the extent of this.
Moreover, the psychological and the social impact of this is important.
The timeline for this is also extremely crucial.
Often the timing of the crash more than the actual extent of it causes the damage.
Moreover, it is extremely important to assess the damage on liquidity situation.
This is perhaps why the ECB viewpoint is so important at this juncture.
It highlights the complex nature of the overall dynamics.
In fact the ECB chief, Draghi has called Bitcoins as high-risk investment.
He also emphasized that the European Central Body is working to assess the overall risk.
Given the challenges revolving around virtual currency, this is particularly worrying.
This clearly highlights the associated risk in the entire dealing of the currency.
In many ways, it is also an indication of the global uncertainty about Bitcoin.
This particularly makes it important to have a clear handle on the price outlook.
5. Prediction of Overall Prices
If you compile the views of a range of analysts, Bitcoin price is really interesting.
By 2022, this cryptocurrency may actually be nearing the $100,000 mark.
While leading experts have raised concerns, the average sentiment on street is buoyant.
Regular investors are working with $76,000 target by 2022.
That means it will be wrong to prepare for a crash anytime soon.
Moreover, the street expects Bitcoin prices to treble in one year.
They expect the prices to rise to $24,000 from $8000.
Now this will be interesting after prices already doubled in 2017.
These prices can work to douse the flames of uncertainty around Bitcoin.
Most analysts feel that a Bitcoin crash is unlikely in the near future.
But yes, like Silbert mentioned value erosion could happen.
But none of it will be an overnight development.
These are gradual, tried and tested routes to mobilize resources.
In fact, a group of experts sees Bitcoin prices scaling $50,000 is little over a year.
This goes on to highlight the relative market excitement about this currency.
Perhaps it also explains the higher highs it hits after every crash in prices.
Overall the Bitcoin Is Not Expected to Hit Zero
The question then is why is there so much of negative sentiment about Bitcoin?
If the street does not predict prices hitting a zero, why is the investor community so worried?
I feel the relative lack of awareness about Bitcoin is a key catalyst for it.
People are primarily unaware of the dynamics of Bitcoin trade.
Additionally Bitcoin prices are very volatile, and they have wild swings.
This also makes it easy for speculators to take positions and route illegal money.
However, with better regulation, this problem can be weeded out.
Overall the Bitcoin is not expected to hit zero.
The market also predicts Bitcoin hitting north of $76,000 by 2022.