Bitcoin will fall in 2020
Bitcoin (BTC) forecast 2021-2024: How far will the Bitcoin price rise?
That moves the Bitcoin price in May
Hardly any other topic is currently as popular with investors as Bitcoin. The leading cryptocurrency also reached a new all-time high in April and is therefore still in the middle of a bull market.
However, it is not easy to forecast the development of the Bitcoin price. The opinions and forecasts of individual market participants and experts could hardly be more different.
As part of our Bitcoin forecast we show you how the Bitcoin price could develop in the future.
The most important Bitcoin news in May
- Bitcoin marks new all-time high
- Coinbase goes public - read our Coinbase stock analysis here
- Visa API enables Bitcoin to be used by all banks
Current price development & scenario
In order to be able to assess whether Bitcoin is currently worth buying, it is worth taking a look at the current Bitcoin price.
At the top of the April rally, Bitcoin just failed at the important limit of $ 65,000. Nonetheless, the current upward trend is unbroken and further price increases are within the scope of the possibilities.
When it comes to making the right investment decision, however, investors shouldn't rely on hopes and expectations. Rather, short-term price signals can give a possible clue to find suitable entry and exit times. If you are thinking of investing in Bitcoin for the long term, then you should pay less attention to technical chart subtleties, but rather focus on fundamental developments in technology and the adaptation of the cryptocurrency.
As a result, we refer to chart technical indicators for the current price development, which enable a Bitcoin forecast. Stefan Bode has published an interesting technical chart analysis on TradingView.
Of course, the divergences in the Relative Strength Index (RSI), which have built up over a long period of time, are particularly exciting. If BTC exceeds the threshold of 70, then the leading cryptocurrency is by definition overbought and the probability of a corrective movement is particularly high.
From the current perspective, there are two basic scenarios that investors should observe in the coming days and weeks:
- Under $ 45,000: To the extent that BTC falls below the important resistance at around $ 45,000, this could initiate a short-term consolidation.
- Exceeding $ 65,000: An alternative development would be to continue the intact rally. If it exceeds $ 65,000, another bullish move would be possible.
Should a correction to below USD 45,000 take place after the latest April records, then a stronger consolidation can be expected from a chart-technical point of view.
There is also the possibility that the April 18th sell-off is only a short-term correction. In that case, the next major psychological mark would be $ 65,000. If the all-important $ 70,000 is exceeded, Bitcoin could rise even more.
New major investors
There were also some Bitcoin purchases on the part of major investors in March and April. Above all, MicroStrategy has again bought bitcoins worth 15 million US dollars. The company's total investment in Bitcoin now amounts to 91,326 BTC
Although not a purchase, the development at the Grayscale Bitcoin Trust is important news for investors. The company is currently planning to convert the Bitcoin Trust (GBTC) into an ETF. If this project succeeds, millions of small investors would have the opportunity to invest in BTC via an ETF. With this development, the assets under management (AUM) should increase.
Square and Tesla remain important companies that could set the market in motion with further acquisitions. It wasn't until February that Square invested $ 170 million in BTC, causing a stir.
Elon Musk invested $ 1.5 billion in Bitcoin through Tesla. At the same time, the entrepreneur announced that customers could pay for their vehicles with Bitcoin in the future. After the announcement, Musk followed up the words with deeds. With his tweet on March 24th, the CEO finally announced the implementation of the promise.
You can now buy a Tesla with Bitcoin
- Elon Musk (@elonmusk) March 24, 2021
The payments are also not converted into fiat currencies, but held in the form of BTC. With this approach, Tesla not only increases its own Bitcoin exposure, but also strengthens the fundamental basis of the cryptocurrency.
However, the news about Bitcoin did not end at Tesla, there are also some innovations on the PayPal side. Since the end of March, US customers have not only been able to buy and sell Bitcoin via the platform, but also use BTC as a means of payment.
Accordingly, customers can now use the digital currency to pay at more than 26 million merchants. In these cases, a conversion into the corresponding fiat currency takes place, but the possibilities for using BTC in general are increasing rapidly.
Technical development at Bitcoin
A few years ago, Bitcoin was still considered the means of payment of the future, but the status quo has fundamentally changed in recent years. Investors now see BTC as a digital asset and a hedge against the ailing financial system.
In addition, Bitcoin is probably the largest and most secure decentralized network in the world. In order to ensure this status, however, regular updates must be carried out. However, the high degree of decentralization contributes to the fact that the development of updates for Bitcoin takes a long time and has to be weighed up in the network.
In general, the security of the network takes precedence over the rapid implementation of new features. In addition, every upgrade must support the old version of the network and be backwards compatible.
The last major update that investors experienced took place in 2017. It was then that SegWit was introduced and it helped increase the number of transactions per block.
In 2021, Taproot is the next big upgrade of the blockchain. The decisive factor will be the Schnorr signatures, which enable improved data protection and increase the scalability of the Bitcoin blockchain. In addition, Smart Contracts should also find their way with Taproot.
Bitcoin general facts
Bitcoin (BTC) launched its Genesis block in January 2009. The open source project was founded by an unknown person or group under the name Satoshi Nakamoto.
The goal of Bitcoin is to enable users to store or transfer money to others without relying on centralized third parties such as financial institutions or governments. People should be in full control of their wealth again.
Since its inception, Bitcoin has generated a lot of buzz and has been lauded for its potential to compete with VISA as a global payment option.
After the value of Bitcoin rose almost continuously over 5 years, the first setback came. It gradually turned out that limited network capacity is becoming a problem.
Since then, like many other blockchains, scalability has been a hot topic. During the bull run, transaction fees also rose rapidly, making Bitcoin less attractive. Especially in the micro-payment sector, fees of 40 US dollars in some cases made smaller transactions unprofitable.
Bitcoin solved the problem with Segregated Witness (SegWit). On August 23, 2017, the SegWit network upgrade (Segregated Witness) was carried out. It significantly increases the capacity of the Bitcoin blockchain and improved its position over competing high-throughput blockchain technologies. Bitcoin was also one of the first blockchains to implement a second-tier scaling solution with the Lightning network. The Lightning network is generally considered to be the second half of the solution to the Bitcoin scaling problems that were first addressed with SegWit.
Bitcoin Fundamental Development - What Affects the Bitcoin Price?
Before we go into the current Bitcoin forecasts, we want to evaluate which fundamental factors positively influence the Bitcoin price.
These are basically qualitative factors that cannot be put into hard numbers. In addition, these factors differ from chart-technical factors, which are more likely to be applied to short-term periods. Our qualitative factors are to be understood as aspects that are to be used for a medium to long-term forecast of the Bitcoin price.
Probably the most important factor for the success of Bitcoin is the adaptation of the protocol and of BTC as an underlying asset - primarily as a store of value.
Bitcoin has had some successes here in recent years, which have a positive influence on the fundamental starting situation. The Bitcoin network in particular has grown rapidly in recent years. If, for example, Metcalfe's law is used, which is used to evaluate networks, then the value of the network is measured using the squared user base.
Thus, a rapidly growing network results in a disproportionate increase in value, which benefits the existing network participants.
But in addition to an increasing number of Bitcoin investors, companies that drive the infrastructural development play a role. Bitcoin exchanges such as Coinbase or companies that develop their own products based on the network can be listed here.
In particular, we want to list the high relevance of companies such as PayPal or Square that support Bitcoin as a means of payment. But Tesla, which accepts Bitcoin for paying for vehicles and services, is also contributing to the positive adaptation of the technology.
Private and institutional market demand
Another factor that goes directly with the adaptation is the demand for Bitcoin. Bitcoin is a scarce resource - there can be a maximum of 21 million BTC. Accordingly, an increasing demand for a scarce resource inevitably results in rising prices.
Since its introduction in 2009, the price of Bitcoin has been significantly influenced by private demand. However, a paradigm shift is currently taking place. More and more institutional investors are starting to buy Bitcoin. The examples from Tesla, Grayscale, MicroStrategy, Square or MassMutal already mentioned can be cited here.
But institutional analysts are also starting to accept Bitcoin as a valid investment vehicle. As a result, it can be assumed that an increasing number of invested companies will contribute to a further shortage. In particular, the long-term orientation of such investments at the corporate level contributes to this shortage.
Ultimately, regulation also makes a major contribution to the development of a value. This fact is often overrated, however, because in large networks like Bitcoin, regulation is difficult to implement due to their decentralized nature - the same applies to a complete ban. At the same time, unexpectedly strict regulation can also have a negative impact on Bitcoin price development.
The latest example of Turkey, which wants to ban Bitcoin in order to ensure the stability of the Turkish lira, can be cited here. Prohibiting an asset makes it difficult for investors to invest in it. However, this is also an opportunity for other states to present themselves more openly.
Overall, however, a lot has happened in terms of regulation in recent years. So this legal situation for Bitcoin investors in Germany is fundamentally quite clear. There is also clear case law in other important countries such as the USA.
Bitcoin price forecast using the stock-to-flow model
There are numerous models that can be used to forecast price developments. The stock-to-flow model (S2F) from PlanB is the best-known forecast model for Bitcoin forecasting.
The entire model is based on the stock-to-flow ratio. The model sets the amount of BTC in circulation, the so-called stock, in relation to the bitcoins produced annually, which are referred to as flow.
The mathematical formula of the S2F:
The higher the result of this calculation, the scarcer the underlying asset is. In addition, the result of the calculation can be used to derive how long it will take to double the current stock with constant flow.
In practice, this model is regularly used to value assets such as gold. However, the next Bitcoin Halving in 2024 will help Bitcoin replace gold as the most stable asset.
In the Bitcoin stock-to-flow model, Bitcoin analyst PlanB describes how a halving event affects the development of the Bitcoin price. If we assume PlanB's model, the Bitcoin price will exceed the magic threshold of 100,000 US dollars in 2021.
As early as 2025, we could see an exchange rate of more than $ 1,000,000. If we place the Bitcoin Chart over the S2F model, the result is an accuracy of 95%.
Current Bitcoin price forecasts by the analysts
JP Morgen Chase delivers one of the most interesting Bitcoin forecasts. The big bank has long been considered a Bitcoin critic, but has now adopted a different stance.
In a study, the major bank predicts that Bitcoin will reach a price of 146,000 US dollars in the medium term. In addition, the analyst Nikolaos Panigirtzoglou stated that there will be shifts between gold and Bitcoin. These could be beneficial for Bitcoin and spur further price development.
Even more exciting, however, is the outlook that Bloomberg recently published. Accordingly, a Bitcoin rate of 400,000 is possible in 2021. The experts justified the assessment of this price development with the Bitcoin bull market from 2017.
#Bitcoin in Transition to Risk-Off Reserve Asset: BI Commodity - Well on its way to becoming a global digital reserve asset, a maturation leap in 2021 may be transitioning Bitcoin toward a risk-off asset, in our view. pic.twitter.com/Ycr1LSqEAJ
- Mike McGlone (@ mikemcglone11) March 26, 2021
The forecast of a senior analyst at the major bank Citibank is somewhat older but no less bullish. Accordingly, there are clear parallels between the gold market of the 1970s and the current Bitcoin market. As a result, Thomas Fitzpatrick thinks a rate of US $ 300,000 is possible.
Citibank bitcoin technical analysis.
Target: Moon. pic.twitter.com/prB1YjVNhX
- Alex (@classicmacro) November 13, 2020
Bitcoin forecast: what do the experts say?
The opinions on Bitcoin and the long-term Bitcoin forecast differ very widely. Below is a list of some (alleged) blockchain experts and famous personalities on the price development of Bitcoin:
The Microsoft boss has never made a secret of his attitude towards Bitcoin. Gates doesn't want to give exact dates or numbers, but he believes Bitcoin will sooner or later end up at $ 0.
That is, he believes the price will implode and Bitcoin will crash. His rationale for this radical assessment is that Bitcoin as an asset class does not produce anything that would justify equivalent value.
Dear @BillGates there is an easy way to short bitcoin. You can short #XBT, the @CBOE Bitcoin (USD) Futures contract, and put your money where your mouth is! cc @ CNBC @ WarrenBuffetthttps: //t.co/4JIhF5vWsZ
- Tyler Winklevoss (@tyler) May 7, 2018
Therefore, in his eyes, it is a matter of pure speculation that will eventually get lost. Joe Davis, head of Vanguard's investment strategy group, shares a similar mindset. For him, Bitcoin is not an attractive store of value due to its high volatility.
Rogoff is a professor at Harvard University and former head of the International Monetary Fund. In a CNBC interview, he commented on the Bitcoin forecast and gave a personal assessment for the year 2028.
In his opinion, BTC will only be worth around $ 100 by then. He, too, argues similarly to Gates and bases his Bitcoin forecast on the relatively limited possibilities of use as a means of transaction.
In his opinion, Bitcoin would hardly pass as an attractive transaction tool other than for money laundering or tax evasion.
Winklevoss twins Cameron and Tyler are well-known personalities in the Bitcoin scene. In a very short time, they were able to generate a net worth of over 1 billion US dollars. Cameron Winklevoss suspects the Bitcoin price will be around $ 320,000 in 10 to 20 years.
At $ 63K #Bitcoin it feels like we're running downhill towards $ 100K
- Cameron Winklevoss (@cameron) April 15, 2021
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