Conflicting predictions about the price of Bitcoin
In these days of uncertainty, a number of very different predictions about the price of Bitcoin are circulating.
However, it is necessary to distinguish short-term predictions from medium-term to long-term ones, because the biggest differences depend precisely on the period considered.
Short Term Bitcoin Price Predictions
In the short term, many claim that the price of Bitcoin could fall.
For example, according to experienced investor Mark Mobiusfounder of Mobius Capital, even knows the price drop as low as $10,000.
He revealed this in a recent interview given to Bloomberg, saying he believes $10,000 is the next destination for the price of BTC.
However, he also admitted that cryptocurrencies are “too dangerous” for him and therefore he will not invest his own money or his clients’ money in them, but added that he believes “they are here to stay because” thanks to many investors who have trust in them.
Additionally, he said that he finds it very curious and interesting that the price of Bitcoin has basically held up through the declines this year.
Mobius is not alone in its belief that the 2022 bottom has not yet been touched.
In addition to his $10,000 prediction, others also claim that the price could still fall to $12,000 or $11,000, although there seem to be several who claim that a further descent could stop at $13,000 or $14,000.
A further decline in the market
The fact is that there are as many as two factors that seem to point precisely towards the possibility of a further short-term descent to these levels.
The first relates to the two previous post-bubble bear markets. In fact, the bottom was touched in both cases -85% from previous peakswhile this year for now it has stopped at -77%.
However, it is worth mentioning that the bubble of 2021 was much smaller compared to the gigantic and resounding one of 2013 or the otherwise remarkable one of 2017. In fact, in 2013 the price of Bitcoin grew by 8000% in a single year until the bubble burst, while the in 2017 still made a remarkable +1700%.
In contrast, the speculative bubble on the Bitcoin price in 2021 stopped at a not particularly outstanding +245%, so even the post-bubble drop may have a smaller size than before.
To this it is worth adding that after the 2013 bubble, the bottom was touched in January 2015, and not in December of the following year, as happened instead in 2017/2018.
So it would not be surprising if the bottom of this phase was not touched in December 2022, but in January 2023.
The second factor is the fact that historically the price of Bitcoin lateralizes at the end of the year. While during a bull run it is precisely between November and December that it usually sets highs, during a downturn it is precisely between November and December that such declines are often reinforced.
In this connection, however, it should be added that already in this month of November the decline has been significant, so in theory the bottom may already have been reached.
In fact, if it had been no FTX failure it’s possible we wouldn’t have fallen below June’s $17,500, and the November bottom was $15,500 anyway.
It is probably this data that makes Mobius find it interesting that the price of Bitcoin has largely stayed up this year. Something vaguely similar happened between March and April 2020, when all the financial markets collapsed due to the outbreak of the pandemic. In fact, in the weeks following the collapse, the price of Bitcoin responded quite well, recovering all losses as early as May.
Bitcoin (BTC) Price: Medium Term Predictions
The matter changes completely if you move the horizon of the forecast a little further forward.
It is actually rare that those who predict a decline in the short term also comment on the medium to long term.
In fact, as in the case of Mobius, quite a few speculate on a further decline in the short term, but at the same time state that cryptocurrencies are not destined to disappear from the markets.
Instead, there are several analysts who remain optimistic about Bitcoin’s price, both in the medium and long term.
For example, venture capitalist Tim Draper repeated his prediction by the end of 2023, the price of BTC will reach $250,000.
However, it is worth clarifying that while short-term forecasts are based on signals directly from the markets, medium- and long-term forecasts are based on assumptions that are not derived from the current market situation, but from a hypothetical long-term trend. in the price of Bitcoin.
To be fair, until a few months ago there were also those who believed that the price of BTC could rise again even during 2022, when in fact this was not the case. However, the potential for possible growth in the coming years is there.
Halving and long-term predictions
It is even more difficult to make long-term forecasts, but if in the short term the price of Bitcoin is strongly influenced by the dynamics of financial markets, in the long term it is influenced by other dynamics, such as monetary and monetary policy. central banks’ policy.
Paradoxically, it seems that so far it has been easier to guess Bitcoin’s long-term price trend than short-term changes.
For example, recognized investor Cathie Wood from Ark Invest recently reiterated that she still believes it is possible for Bitcoin’s price to rise to $1 million by 2030.
The fact is that Bitcoin has a cycle of about four years due to halving.
The halving happens exactly every 210,000 blocks mined and added to the blockchain, and at a rate of about 10 minutes per block, there are about 3 years and 10 months between halving events.
The next halving is scheduled for spring 2024, and in all three previous cases one bull run was triggered the year after the halving.
In fact, halving is Bitcoin’s only monetary policy measure, and it involves halving the BTC that is created and given as a reward to those who can mine the blocks. Since this reward is the only form of BTC creation that exists, halving it will also inevitably reduce the inflation rate of the money supply.
The half-life is certain and predictable, while any price consequences are not. In fact, the halving directly only affects the supply of BTC in the markets, but not the demand. But when demand is equal, a reduction in supply inevitably leads to an increase in price.
So far this has always been the case, after the halvings of 2012, 2016 and 2020, and should the demand for Bitcoin not decrease significantly, the same could happen after 2024.
While the halving cycle makes the rate of inflation of the BTC money supply very predictable, and especially monetary policy measures in the long term, this is not enough to make price developments predictable.
