Saturday, July 13, 2024

Worst Predictions For The Bitcoin Price In 2020

Cryptocurrency experts and analysts love to issue Bitcoin ( BTC ) price predictions regardless of how volatile the asset class is.

In 2017, there were predictions that the price of BTC would reach $ 35,000 – $ 50,000, and of course some brave souls predicted that the price would exceed $ 1 million before correcting itself.

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No one will forget how John McAfee infamously promised to bite his 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 reasoning, some of them are so far removed from reality that they have become memes.

Let’s review the most scandalous Bitcoin price predictions of 2020.

“Guess” attracts attention because no one follows them.Guessing the future price of cryptocurrencies is so embedded in the community that many analysts don’t even consider evaluating its effectiveness.
Keeping up with the endless stream of predictions posted on blogs, podcasts, Twitter, and YouTube is nearly impossible. Imagine the difficulty and energy it would take for a person to keep track of all these random assumptions.

To further complicate matters, some of these predictions came from known Bitcoin attackers, such as famous gold fanatic Peter Schiff and New York University Stern School of Business professor Nouriel Roubini. Therefore, in some cases, personal credentials sometimes matter less than analytical work models.

Bitcoin Beats Warren Buffett’s Berkshire Hathaway For Market Cap. A month before the collapse on March 12, in which the price of Bitcoin plunged 50% to $ 3,750, PlanB, the creator of the stock-to-flow model, declared that Bitcoin would not go below $ 8,200 again . At the time, no one expected the Dow Jones equity index to face its most significant drop since 1987, or the WTI oil futures contract to drop to negative $ 40.

Despite the outlandish claim, PlanB will not be nominated for the worst predictions of 2020 because hardly anyone expected the coronavirus pandemic to affect markets in a way that would cause utter chaos. Furthermore, the famous chartist Peter Brandt also made the same mistake when he said that BTC would never visit the below $ 6,000 level in January again.

CryptoWhale’s quantum model predicts $ 24,000 BTC by mid-2022. On June 2, 2020, Twitter analyst CryptoWhale revealed a new “quantum” model that would predict the price of Bitcoin. According to CryptoWhale, the model had “effectively predicted all major moves since 2018.”

Things couldn’t have gotten worse as the model predicted both a bottom of $ 2,000 in 2020 and a “proper bull run to $ 24,000” in mid-2022 alone . Somehow, quantum particles, molecules, and atoms that are he supposed they would make it more precise were, in fact, pure blasphemy.

Two lessons to be learned from the “quantum model” are: ( 1) Having a ton of followers on social media doesn’t necessarily translate into better price estimates, and (2) complex models are prone to the same errors as humans . Assessing a new asset class during a period of desperate central bank monetary easing is no easy task.

In April, Ross Ulbricht, founder of the now-defunct darknet market Silk Road, wrote that Bitcoin’s volatility, particularly the March 12 bloodbath, would likely lead to a bear market , which could last three to nine. months . At the time, Bitcoin had been hovering around $ 7,000 and was clearly still affected by the recent 50% intraday correction.

Precisely 17 days after that post , BTC soared more than 30% to $ 9,000, thus completely invalidating Ulbricht’s analysis. To further show just how far that analysis was, Ulbricht added that a bull run to $ 14,000 was “very unlikely.”

During the so-called Ulbricht bear market period, the price of Bitcoin rallied more than 300% from December 2018 to June 2019. Also, asking for such a long correction does not align with the historical Bitcoin data because even during the period Darkest December 2019, Bitcoin price remained more than 100% above the lows of the previous year.

During a July 27 interview with Forbes, Panxora CEO Gavin Smith said that he expected a Bitcoin price of $ 7,000 by the end of the year. Gavin further added that “there will be a short-term washout this year before the real rally takes place.”

The Panxora CEO explained that despite the upward trend caused by hedging against inflation, the broader impact of the demand hit on the economy could cause BTC to go down.

This estimate came after 80 days of the Bitcoin price consolidating around $ 9,500. At the time, despite having risen 100% from the mid-March lows, there were still some doubts about BTC’s ability to break through the $ 10,000 resistance.

Antoni Trenchev Predicts a Bitcoin Price of $ 50,000 in 2020.On January 3, 2020, Nexo co-founder Antoni Trenchev stated that BTC could easily reach $ 50,000 in 2020 .

Other than an overly optimistic estimate, the logic behind this doesn’t 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.

As shown above, gold traded in tandem with traditional markets for most of 2020, but it should be noted that these asset classes have different volatility. Therefore, swings in equities tend to be much stronger. However, the general direction of both markets until November has been very similar.

This price movement creates the impossible task in which BTC is expected to act as “the new gold” while exhibiting a lack of correlation. This estimate was doubly incorrect because it did not meet its year-end target by a wide margin and it did not correctly estimate gold’s correlation with traditional markets either.

Now that the price of Bitcoin is just 7.4% off $ 30,000, it will be even more interesting to see what kind of outlandish bullish and bearish price estimates are issued for 2021.

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