What is a realistic price for Bitcoin by the end of 2018?
People throw out all kinds of numbers for the price of bitcoin by the end of 2018, but what are those based on?
Over the past couple years it has become very popular to make price predictions on bitcoin for the end of the year.
Surprisingly, in recent years people have undershot what actually happened.
Last year, people were saying bitcoin would end the year at $2k, $5k, or even $10k and that seemed pretty optimistic considering prices were hovering around $300-$600 at the time.
Low and behold, prices hit $20k, and the rest is pretty much history.
What can we expect this year?
We have seen predictions of $15k, $25k, $50k, etc... but how do they come up with these numbers?
A few of them are pulling numbers out of thin air, but some of them base those predictions off of past trends as well as the cost of mining.
If we look a logarithmic chart of bitcoin dating back to its genesis, we can see that there has been a fairly defined trend that prices have followed.
Basically, it started from the left and has slanted fairly significantly up and to the right:
Based on this trend, one would expect to see the price of bitcoin around $21,000 by the end of 2018.
Looking out one more year, one would expect prices to be around $67,500 at the end of 2019 based on the same trend.
Those are some pretty impressive numbers, but those are exactly the numbers that Pantera Capital is predicting for the end of 2018 and 2019, based primarily off of the trend line I just showed you.
(Source: https://steemit.com/bitcoin/@bizon18/head-of-pantera-capital-now-is-the-right-time-to-buy-bitcoin)
What about a price prediction not solely based on trends?
Tom Lee of Fundstrat Global Advisors says that they like to make price predictions based on trends as well as the cost of mining.
Prices in other commodities are often determined by their cost of mining, why shouldn't bitcoin be any different?!
According to Tom, the fully loaded average cost of mining will be around $9,000 by the end of 2018.
Bitcoin has historically traded for around 2.5x the cost of mining, which would give us a price target of around $22,500 by the end of the year.
Tom rounds up and gets us to his $25k year end call.
Using that same model he also came up with a price target of $90,000 by the end of 2020 due to the increasing cost in mining.
Something interesting to take note of is that the price of bitcoin often trades much higher than 2.5x the cost of mining during bullish periods, which means Tom was making his predictions off of a base case...
In other words, he thinks it hits those prices at a minimum.
(Image Source: https://vi.bitday.com/post/tom-lee-cua-fundstrat-global-advisors-de-xuat-mua-bitcoin-ngay/)
Conclusions:
Using both historical trends and the cost of mining as a price predictor we get wildly higher prices for bitcoin within the next 6 months as well as the next few years.
Historical trends indicate prices likely hit $21k by the end of this year while the cost of mining indicates we likely hit around $25k by the end of this year.
Whichever method you subscribe to, we get roughly a triple from current levels in about 5 months.
Not sure about you, but I sure like those returns.
Stay informed my friends.
Image Source:
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You and John McAfee!
Seems Tough but we can't say anything in this case as Bitcoin always Comes up beyond expectations..!!
It's almost one of those things where if it gains enough popularity to get to something like $100k, it's probably going to $1 million because it will mean it has established itself as a global currency.
25k is my bet
I'm more conservative with $12k.
😂😂😂
Hope This comes True
ASAP
50K 50K 50K
💰😂💰
By the end of 2018?
Why not? 😂😂😂. Just dreaming
Hey, I won't complain!
Hahahahahaha... No.
12'000$ - 16'000$ At Max.
I am more in your ball park as well. I think it is going to take more time still for things to reset before we have another parabolic move.
@jrcornel The bitcoin price crossed the $8,000 mark earlier this week, supported by a massive spike in buy volumes across all major cryptocurrency exchanges. 𝐒𝐨 𝐈 𝐭𝐡𝐢𝐧𝐤 𝐢𝐭 𝐜𝐚𝐧 𝐞𝐚𝐬𝐢𝐥𝐲 𝐫𝐞𝐚𝐜𝐡 𝟐𝟓𝟎𝟎𝟎$ 𝐛𝐲 𝐭𝐡𝐞 𝐞𝐧𝐝 𝐨𝐟 𝐭𝐡𝐢𝐬 𝐲𝐞𝐚𝐫. But we can only give predictions,actually no one knows where it will go.𝐖𝐡𝐚𝐭 𝐝𝐨 𝐲𝐨𝐮 𝐬𝐚𝐲?
I think between $10k-$15k personally, though I could see the case for $20k-$25k as well. An ETF needs to be approved for those numbers though.
@jrcornel yes, your'e right
The problem is adoption is not linear.
And we are moving into the early adopter phase.
I am fairly sure we will hit $100,000 bitcoin by the end of this year.
Or, in other words, we need to add to that logarithmic chart above the loss of purchasing power of the dollar, which will make it a log-log chart.
Cryptos are going to become so valuable, that everyone will be mining on whatever they have. Thus the mining chart is going to see a huge influx of difficulty, that is not accounted for.
And i mean, cryptos will be sooo valuable, as in, it will buy groceries when your (insert fiat) won't.
Well if bitcoin were to hit $100k within the next 5 months, as you say. You are right, I would hate to see what the dollar can buy at that point. Sounds like you are calling for a fiat collapse as soon as this year?!
I do not feel we are going to see a fiat collapse... we will see more slow burn. (I expect 12-20% inflation in food prices), but i do expect some banks to have big problems.
It is so really hard to see. By all old measures, we should have had a fiat collapse already. But, something is holding it together, and something is keeping cryptos from getting squashed. Slowed down, yes, but squashed, no.
But really, what will be the big game changer is when the huge wave of stores accepting cryptos happens. That will change all of the graphs.
That is likely true. I imagine that is why they use a logarithm chart in the first place, to help smooth it out a bit. The price increases are certainly not linear, though it was interesting to hear Tom mention that bitcoin tends to trade roughly 2.5x the cost of mining since its inception. That would imply that investors are not speculating as blindly as some think. There is some rational to when they buy and sell.
That was my number exactly lol. See my comment about the gallup poll that just came out.
I doubt that we see a bubble-like bulls run like last year. My guess is that we finish 2018 between 10k and 15k max.
Those are exactly the numbers I am thinking as well. My numbers are mostly pulled out of thin air, but something between $10k-$15k is exactly what I am thinking come December of this year.
wow great your post keep it up
NEVER PREDICT CRYPTO IT MIGHT HURT.
Especially when you put money on the line to back your predictions.
Especially when you
Put money on the line to
Back your predictions.
- jrcornel
I'm a bot. I detect haiku.
Wow! This is exciting! There is nothing else out there like crypto. Nothing 🙌🏻
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Maybe some old penny stocks. :)