Bears Battle Bulls at $7000: Where Will Bitcoin Price Go From Here?
As Bitcoin price (BTC) continues to trade in the red, losing roughly around 15 percent of its value over the last week, two econometric models forecast either a very bright future or particularly hard times ahead.
Economics Professor at Columbia University Panos Mourdoukoutas and one of his students turn to econometric models to forecast the price of the world’s largest cryptocurrency in 2020. The two models they used picture two completely opposite potential outcomes.
According to Adam Haye’s model, Bitcoin 00 will reach a price of $55,931.60 by the end of 2020. The bullish forecast is predicated on the supply of the cryptocurrency. Mining is expected to grow at a slower pace as we are getting closer to the 21 million cap. While it’s not a match for John McAfee’s famous prediction of Bitcoin reaching $500,000 by 2020, this is still a massive increase from where the currency is trading at right now.
There are now less than 4 million bitcoins left to mine. Furthermore, unless there is some unexpected and abnormal change in hash rate, the reward for successful BTC miners will drop from 12.5 to 6.25 per block in 2020.
The scarcity of the world’s leading digital currency is making it even more attractive, which is what this econometric model is based on.
Bearish forecasts, though, are also on the table. According to Spencer Wheatley’s paper, which is widely based on Metcalfe’s Law. The Zurich professor sees the total market capitalization of Bitcoin — currently more than $120 billion, contracting to $41 billion.
The authors of the paper also predict serious volatility in the price of the first and foremost cryptocurrency:
Looking forward, our analysis identifies a substantial but not unprecedented overvaluation in the price of bitcoin, suggesting many months of volatile sideways bitcoin prices ahead.
While volatility is oftentimes pointed out as one of Bitcoin’s core weaknesses, Arthur Hayes, CEO & co-founder at cryptocurrency exchange BitMex, says that it’s actually a quality that’s much needed:
You want as much volatility as possible to have as much chance that Bitcoin goes to $50,000, $100,000, $1,000,000, whatever that high number is.
In any case, as Bitcoin marks yet another day in the red, the Intercontinental Exchange (ICE) has teamed up with Starbucks and Microsoft on the creation of a digital asset platform dubbed as Bakkt. According to popular cryptocurrency commentator and founder of investment firm BKCM LLC Brian Kelly, this will make the launch of a Bitcoin ETF “much easier” and it represents the “biggest news of the year for Bitcoin.”
Where do you see Bitcoin in 2020? Don’t hesitate to let us know in the comments below!
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