Bitcoin price predictions for 2020 are about where the market expects the top crypto to go as it begins its second decade. Given, the 2010s have no doubt been an eventful ten years for Bitcoin and cryptocurrencies.
Bitcoin soared to prices near $20k in December 2017, an all-time high price that served to shine focus on crypto. Since then there has been increased regulatory scrutiny, entry of institutional investors, focus on blockchain adoption and the emergence of crypto as the new investment vehicle.
Bitcoin (BTC) is at the moment perched just above $7,200, its 2019 performance boasting an impressive $4,300 return. Diehards say Bitcoin will soar again, but can it go as high or surpass its all-time high?
One notable statistic points in that direction:
Of all the bitcoins in circulation this year, 64% remained held in the same wallets.
As far as fundamentals go, the HODL’ers conviction is likely to prove the most important factor. That long-term view by investors has helped Bitcoin price and could give future price performances a further impetus.
A confluence of factors and the complexity of the crypto ecosystem make predicting Bitcoin prices a little harder. However, fundamental to any potential price movements is the analysis of different pressures on the Bitcoin price.
For instance, Bitcoin miners may impact prices due to the compounding downwards pressure that comes with declining bitcoin prices and reduced block rewards. The risk is that miners can dump their rigs if prices continue on a downward trend.
Another scenario is miners selling-off their Bitcoin rewards to cut any further exposure to the Bitcoin price decline. Short term, it appears a drop towards $4,000- the current estimate of what it costs to mine a bitcoin- would pile pressure on BTC prices. However, it would take a massive tanking for miners to dump their bitcoins or move on to another “profitable” coin.
Macroeconomics and Bitcoin prices
Unlike what many people would want to believe, macroeconomics does have an impact on the price of Bitcoin.
There is the notion that Bitcoin price does not correlate whatsoever with how the US dollar or such other global fiat currencies perform. Or, there is a strong negative correlation between bitcoin price movement and the economy.
But the Federal Reserve (Fed) and European Central bank can just print much more money, exerting inflationary pressure on respective fiat currencies. Another macroeconomic factor is the potential for an escalation in trade wars (like we witnessed between the U.S. and China). A destabilized global stock market has in the past pushed investors towards buying Bitcoin that acts as a haven asset.
What else within the macroeconomic climate in 2020 could impact markets? The impeachment of U.S. President Donald Trump means all eyes are on the Senate. Recently, an escalation in the U.S.-Iran conflict threatens to add to the turbulence likely to hit the stock markets.
While instability in the global markets has historically benefitted Bitcoin, we can only wait to see how things pan out if it occurs. Will it tilt negative or remain somewhat “neutral” as seen with the current positivity on Wall Street and an uptick in global stock markets?
Bitcoin price boost on “halvening”
The “halving” is a highly anticipated Bitcoin event set to occur in 2020. It involves a decrease in the reward that miners earn for mining and happens every four years. Analysts point to a potential bitcoin price boost as the halving will significantly reduce the supply of bitcoins released into circulation.
Demand for BTC could soar in the days leading to the halving. Analysts see the increased on-chain activity and an increasingly bullish community as indicators that the halving could drive bitcoin prices higher.
What’s the perspective on the Bitcoin price 2020?
It’s good to note that predictions and rationalizations of the price movements of any given asset can end up being all wrong.
For instance, a decline in Bitcoin may not correlate to anything in particular. It means, for example, that the price could be down because prices generally went down. But as can be seen, the asset’s overall market performance never lies, with any justifications for its movement all down to probability.
Nonetheless, several factors could combine to make 2020 the “year of cryptocurrency.” a slow start to 2019 still saw Bitcoin end the year 85% higher and that could be the impetus that pushes prices to another level.
Bitcoin (BTC) may not breach the $100k mark in 2020, but the potential for a new all-time high is there. We expect that several factors will drive Bitcoin prices in 2020. That includes the expected institutional participation and a global push for a solution to current flaws in the economic system. Overall, Bitcoin could surge to $35k by the end of the year.
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