Experts and cryptoanalysts are happy to provide price predictions for Bitcoin (BTC), regardless of how volatile the asset class is.
In 2017, it was requested that the price of BTC should be between $ 35,000 and $ 50,000 and, of course, some brave souls predicted that the price would exceed $ 1 million before the correction.
No one will forget how John McAfee promised to nibble off their genitals if the price of BTC didn’t hit $ 1 million by 2020.
While some of these high estimates are based on fundamentals, others are completely unfounded. Regardless of the analyst’s rationale, a handful of them are so far removed from reality that they have become memes.
Let’s take a look at the most outrageous Bitcoin price predictions for 2020.
“Guesstimation” attracts attention because nobody follows them
Guessing the future price of cryptocurrencies is so embedded in the community that many analysts don’t even consider evaluating its effectiveness. It’s almost impossible to keep up with the endless flow of predictions on blogs, podcasts, Twitter, and YouTube. Imagine the difficulty and energy it would take a person to answer all of these random guesses.
To further complicate matters, some of these predictions come from well-known Bitcoin bashers like the famous gold bug Peter Schiff and Nouriel Roubini, professor at New York University’s Stern School of Business. In some cases, personal credentials are sometimes less important than working analytical models.
A month before the March 12 crash that saw the price of bitcoin drop 50% to $ 3,750, PlanB, the inventor of the stock-to-flow model, stated that bitcoin would not return below $ 8,200. At the time, no one expected the Dow Jones stock index to see its biggest decline since 1987, and neither did the WTI oil futures contract drop to a negative $ 40.
Despite the outlandish claim, PlanB will not be nominated for the worse 2020 forecasts, as few expected the coronavirus pandemic to affect markets in ways that would cause absolute havoc. Additionally, famous chartist Peter Brandt made the same mistake when he said that BTC would never hit the $ 6,000 level again in January.
CryptoWhale’s quantum model calls for $ 24,000 BTC in mid-2022
On June 2, 2020, Twitter analyst CryptoWhale unveiled a new “quantum model” that would predict the price of Bitcoin. According to CryptoWhale, the model had “effectively predicted every major step since 2018”.
Bitcoin price in USD. Source: TradingView
It couldn’t have been worse, as the model didn’t forecast both a $ 2,000 low and a “real bull run to $ 24,000” until mid-2022. Somehow the quantum particles, molecules and atoms that were supposed to make it more accurate were actually pure blasphemy.
Two lessons that can be drawn from the “quantum model” are: (1) a ton of social media followers don’t necessarily translate into better price estimates, and (2) complex models are prone to the same errors as humans. Valuing a new asset class at a time of desperate central bank monetary easing is far from easy.
Ross Ulbricht predicts a downward trend nine months after Black Thursday
In April, Ross Ulbricht, the founder of the now defunct darknet market for the Silk Road, wrote that Bitcoin’s volatility – particularly the March 12 carnage – would most likely result in a bear market that could last three to nine months. At that point, Bitcoin was valued at around $ 7,000 and was clearly still affected by the most recent 50% intraday correction.
Ross Ulbricht’s diagram notes. Source: Medium
Exactly 17 days after this blog post, BTC surged over 30% to $ 9,000, rendering Ulbricht’s analysis completely invalid. To further show how far away that analysis was, Ulbricht added that a $ 14,000 bull run was “very unlikely”.
During Ulbricht’s so-called bear market period, the price of Bitcoin rose more than 300% from December 2018 to June 2019. In addition, the call for such a long correction does not match Bitcoin’s historical data, as even in the darkest period of December 2019, Bitcoin price remained more than 100% above last year’s lows.
Gavin Smith says Bitcoin will close at $ 7,000 in 2020
During an interview with Forbes on July 27th, Panxora CEO Gavin Smith said he would expect Bitcoin price to reach $ 7,000 by the end of the year. Gavin added that “a short-term washout this year before the real rally hits”.
Panxora’s CEO stated that despite the appreciation bias caused by hedging inflation, the broader impact of the demand shock on the economy would potentially lower BTC.
That estimate came after 80 days of Bitcoin’s price consolidating around $ 9,500. At that point, despite a 100% surge from mid-March lows, there were still doubts about BTC’s ability to break the $ 10,000 resistance.
Antoni Trenchev calls for a Bitcoin price of USD 50,000 in 2020
On January 3, 2020, Nexo co-founder Antoni Trenchev stated that BTC could easily reach $ 50,000 in 2020.
Apart from an overly optimistic estimate, the reasoning behind this does not seem to fit. According to Trenchev, Bitcoin had become “the new gold,” pointing to the lack of correlation with traditional markets as a potential catalyst.
Gold, USD / OZ (right) vs. S&P 500 (left). Source: TradingView
As shown above, gold has been trading in parallel with traditional markets for most of 2020. It should be noted, however, that these asset classes have different levels of volatility. Hence, stock fluctuations tend to be much stronger. Even so, the general alignment of both markets was very similar until November.
This price movement creates the impossible task of expecting BTC to act as “the new gold” while showing a lack of correlation. That estimate went twice wrong, because it fell far short of its year-end target and did not correctly assess gold’s correlation with traditional markets.
Now that Bitcoin’s price is only 7.4% away from $ 30,000, it will be even more interesting to see what kind of flamboyant bullish and bearish price estimates are released for 2021.
The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph. Every investment and trading step is associated with risks. You should do your own research when making a decision.