As we progress through this year, we have entered Q3. This is an exciting time of year. Many companies both in and out of the cryptosphere are keeping up with their roadmaps and timelines for development. Many companies have raised funds for their new projects and everyone is speculating how the rest of this year will size up. There is a chaotic battle in speculation between Bitcoin maximalists, Crypto enthusiasts and general pessimists of the economy.
What we decided to put together for this article is an array of comments from all kinds of sources and weigh out an average of the speculation that within reason could be reached with Bitcoin and the cryptocurrency industry. It would be fair to say with an accurate prediction that Bitcoin at the end of the year will end up being somewhere between $0 USD and $1,000,000 USD. Neither of those is realistic. It’s impossible at this point for Bitcoin to disappear. If you don’t believe that, keep doing research, you are way behind. It’s also impossible for Bitcoin to reach $1 Million USD at least this year, the future will tell whether that happens or not. So lets dial in the year-end prediction of Bitcoin with some other predictions and then consider how this will effect the alt-coin market.
Finance / Business Person – Bitcoin Predictions – USD
- John Mcaffee (Software Developer) – $29,440 (Based on his end of 2020 prediction)
- Thomas Lee (Fundstrat) – $22,500
- Tim Draper (Venture Capitalist Investor) – $100,000
- Jeet Singh – (Crypto Fund Manager) – $50,000
- Llew Classen – (Bitcoin Foundation) – $40,000
- Alexis Ohanian – (Reddit and Initialized Capital Co-founder) – $20,000
- Imran Wasim – (Financial Analyst AMSYS Group) – $30,000
- Finder – (Financial Comparison Platform) – $14,638
- Anthony Pompiliano – (Full Tilt Capital) – $50,000
- John Pfeffer – (former partner, Kohlberg Kravis Roberts) – $75,000
Based on these figures, here is a summary and average of these predictions: $43,138. Wow! Amazing to consider that at the current value of just under $8,000, that’s a speculative return of 539%! This is exciting to speculate about this, but please ensure that you understand, this is not an advertisement to push you to invest in Bitcoin or crypto. This is a comparison so that at the end of the year, we can compare our speculation to the end result of Bitcoins price on Dec 31 2018. Your investment choices are your own.
If you wanted to make the same returns with traditional investments. A modest and sometimes difficult interest rate to attain with stocks or other banking investments would be 5%. With an $8,000 investment, compounded annually, it would take you 35 years to make the same returns, compared to the last 5 months of this year with an investment into Bitcoin.
So how do you feel about this speculation? Is it high? Is it Low? It will be one or the other. Guaranteed. Let’s continue to focus our assessment here together with some more items to consider.
One important item to consider is that some will compare the hash rate (total amount of Bitcoin miners capacity worldwide) to the value of Bitcoin. Bitcoin Hashrate is continually increasing. The price of Bitcoin increases continually on average. But hashrate really has no measurable correlation to Bitcoin price, as it does not affect supply and demand. A lower hash rate still means the same amount of Bitcoin is released in theory. The mining difficulty would adjust, but nothing else would be affected.
The Cost to Mine Bitcoin
In contrast to hashrate, the cost in electricity to mine one Bitcoin has been said to support the price of Bitcoin. As difficulty is increased over time in the mining algorithm to adjust for more miners going online with more powerful computers, the cost to mine Bitcoin goes up. In many theories, the cost to mine a single Bitcoin should create an support of minimum value, but it doesn’t have to. It’s just a support point where we could reasonably expect that with no other reasons to devalue Bitcoin, any purchase price under the break-even mining cost ( P/BE ) would be what could be considered a sale. That’s a great time to buy but consider many other indicators. So consider what the price of one Bitcoin is today, vs the cost of mining one Bitcoin. You will be able to see a correlation or a sale price. Some even have made further calculations to insist that the value of Bitcoin is 1.8 to 2.5 times the cost of mining. These debates have to be measured and calculated to contest those numbers.
Further to some of these positive projections, we have to consider some negative projections as well. Kenneth Rogoff is the former chief economist at the International Monetary Fund’s (IMF). He estimates Bitcoin will devalue down to $100 based on his 10-year projection. Some have said that Bitcoin will not last and that it will die. A contact of mine said recently, “Bitcoin and every alt-coin will go to zero. Blockchain will continue to grow.” Government regulations, competitive cryptocurrencies, new technology and more can all affect the outcome of this situation. These are interesting comments to explore, and if you are invested in Bitcoin, you should explore as many ideas as you can to continue to follow speculation vs future valuations.
Considering that Bitcoin has been very resilient over the past 9 years, an interesting comment has been made by Saifedean Ammous, who authored the book “The Bitcoin Standard”. He stated that Bitcoin is like a child thrown into the wilderness and after 9 years on its own, and it has survived. It’s creator left it and did not market, change, or support Bitcoin in any way. Having survived on its own over this time, Bitcoin is like a strong beast! Other cryptocurrencies have made so many adjustments, changes and more and yet they cannot overtake the purchasing power, utility and more of Bitcoin. This is why Bitcoin has not died and it will not die. Yes, we know that Bitcoin is not perfect and that during high volumes, service fees are high and transaction times are low. We see this when we want to buy tickets to a concert that sells out in minutes. We still want to go to the concerts, and we don’t imply that the ticketing system is broken. At least we know that Bitcoin can improve with small adjustments such as segwit and future potentials such as the lightning network.
New jobs in the cryptocurrency / blockchain industry have doubled from December 2017 to February 2018. The interesting statistic to come will be to see if these jobs are sustained through December 2018.
If they are sustained, then 2019 will be one hell of a year to be working in the industry. Businesses may have to launch out of the gates depending on their business model. Others will look for a slower and sustainable growth within our industry that allows them to wait out the industries volatility. Any investor or business that can stay in the crypto ecosystem will only have to wait as the exponential growth rewards those contributing talent, real-world products and not simply speculation to their products or services. Some of the most interesting businesses that I have spoken with feel that it’s too early for them to release their blockchain products and services in a young industry. So they position themselves and wait for the right timing. This not only entices investors looking for strong long-term companies to support, but also provides something to look at for companies who have already jumped out of the starting gates with their businesses this year.
Perspective and Positioning
HODL. Stay invested. Plan entry and exit plans. Plan what you do with your cryptocurrencies. Review your plan and celebrate when you have made good decisions. Learn from bad decisions and savour the value of what you have learned in any losses that you take. Educate yourself continually. The world has changed. It’s no longer acceptable to leave investing to brokers, banks and others. You need to educate yourself and take control of your finances. If you continue to rely on others to invest your money, you will continue to not have any long-term wealth. That breaks down the need for education as something that is rhetorical to consider. Learn. Invest. Profit.
What do you think about these predictions? We welcome your comments and sharing of this content.