The new year is approaching with great steps, so analysts and speculators are increasingly sharing their forecasts for next year’s market. Based on the upcoming events, increasingly solid foundations and technical analysis, there are many opinions that the BTC exchange rate in 2020 could reach as much as USD 250,000. This forecast is extremely optimistic, but can it really be that good?
Is the Bitcoin rate likely to reach USD 250,000 next year?
Optimists include experts such as Tom Lee, managing partner at Fundstrat, with over 25 years of experience on Wall Street, and Tim Draper, a well-known VC investor who also invested in Bitcoin at a very early stage of its existence. Both gentlemen agree that a quarter-million-dollar rate is achievable, even by the end of 2020.
Earlier, in an interview with BlockTV, Draper stated that Bitcoin would reach a rate of USD 250,000 by 2022. In his subsequent statements, the business angel went even bolder, suggesting that we can see such a price for BTC already next year.
“If you look at the technical analysis, it looks like about six months after halving, we will exceed $250,000 for Bitcoin.”
As we know, Bitcoin’s halving is scheduled for May 21st. It will result in every next block, not 12.5, but 6.25 BTC. History has shown that in the case of the largest crypto, the law of supply and demand also applies, exactly as in other markets. Therefore, if demand for Bitcoin continues to grow after the supply drop planned in the algorithm, this will result in an increase in price.
Tim Draper Draper refers to the Stock-to-Flow (SF) model, a measurement method based on current supply and annual inflation. The theory says that as the asset shortage increases, we will see a price increase – but not necessarily so. Currently, Bitcoin’s SF is 25 and is expected to increase to 50 after halving due to supply shocks.
My first Medium article! Combining all my tweets about modeling bitcoin's value with stock-to-flow, the halving, power laws, fractals and questions & answers to one logical story.https://t.co/n5P5uMCKHT
— PlanB [Jan/3➞? ] (@100trillionUSD) March 22, 2019
Same Bitcoin price forecast, different basis
Tom Lee is forecasting a similar course for Bitcoin as Tim Draper, but with different reasons. In the Fast Money program on CNBC television, he referred to the so-called logarithmic ascending channel.
Bitcoin price increases in 2020 are very likely and the forecasts of the investors quoted here are based on concrete premises. However, let’s remember that Bitcoin’s ATH is currently about $20,000, so a lot has to happen in the market to see the $250,000 exchange rate. This is not impossible, but it is good to be patient and adopt a long-term strategy.