BITCOIN 2018 FORECAST: HERE ARE THE PREDICTIONS PREPARED BY 7 EXPERTS ON THE PRICE OF DIGITAL CURRENCY

The soaring Bitcoin price observed in 2017 has sparked the enthusiasm of many observers - and some have confided their predictions about the price that Bitcoin could reach in 2018.

It's a fact: Many observers are talking about crazy prices for Bitcoin - some say up to $ 1 million by 2020.

But at the same time, newcomers to this market are caught between two fires. If they believe that the price of digital money should increase in the coming years, they can not help wondering if they have not paid too much - they could have obtained 15 times more if they had taken it a little earlier:

And some fear, in the short term, a sharp correction of the price of Bitcoin - while several financial analysts mention the existence of a speculative bubble, which would threaten to burst at any time.

We remember that the course of Bitcoin plunged last November, while the network was arguing the "hash rate" of minors against one of its forks, Bitcoin Cash. The price of digital currency had thus risen from more than 7,700 to nearly 5,500 dollars in less than 4 days, registering a drop of nearly 30%.

Since then, investors seem to be divided between the specter of a similar drop and a feeling of "FOMO".

The problem is that it is very difficult to evaluate the price of cryptocurrencies. In fact, unlike stock market equities, these are not linked to income levels. As a result, indicators commonly used in traditional markets, such as the price-earning ratio, can not be used by "crypto-investors".

But some analysts have devised other methods to consider the price that could eventually reach the first digital currency. These include the Bitcoin adoption rate, valuation spreads with other asset classes, and imbalances between money supply and demand.

Increasing demand for a limited offer
Some analysts have tried to predict the future price of cryptocurrency by comparing supply and demand for Bitcoin.

David Drake LDJ Capital So, in an interview with The Motley Fool, David Drake, founder of LDJ Capital, predicted that Bitcoin would reach $ 20,000 in 2018. This estimate is based primarily on the limited supply of Bitcoin .

Indeed, only a limited number of BTCs are "mined" each year, at a rate that we know, approximately, in advance. It is thus impossible to emit more corners than what was planned more than 9 years ago by Satoshi Nakamoto, the creator of this digital currency.

"There is a limited supply for Bitcoin, but at the same time the demand for digital currency is increasing," said Drake. "When such a phenomenon occurs, the price increases."

The total number of Bitcoins that may one day be available is limited to 21 million (16.74 million have already been issued). Moreover, the last Bitcoin should be mined in 2140, while the number of BTC granted to minors as a reward is halved about every 4 years.

It should also be made clear, even if Mr. Drake does not mention it, that all Bitcoins that have been issued since the network was deployed are not accessible. Many owners have lost them, such as this man who inadvertently threw a hard disk containing 7,500 BTC. According to a recent study, between 2.77 and 3.79 million Bitcoins would be lost forever - which would further reduce the supply of money that could be poured into the markets.

Without a tool to estimate the "fair" value of digital money, analysts are often led to review their predictions.

Photo by Ronnie MoasIt is the case of Ronnie Moas, the founder of Standpoint Research, who recently revised up its target price for 2018 from $ 7,500 to $ 11,000.

Less than a month later, he was still revising his forecast upwards, to reach $ 14,000 for 2018, before modifying it again at the beginning of December, predicting a price of $ 20,000.

If Mr. Moas is so optimistic, he believes that the capitalization of Bitcoin (now at nearly $ 300 billion) is relatively low compared to $ 200 trillion represented by the main financial assets.

"If 1% of the $ 200 trillion equities, cash, gold, and (all over-valued) bonds in the world ended up in Bitcoin, then cryptocurrency would be worth $ 125,000. In addition, Bitcoin could eventually catch up with gold if it reached 250,000 to 500,000 dollars per corner. "

Mr Moas believes that agents who invest in Bitcoin can expect, in the medium term, the arrival of positive events. Among them, he mentioned the possibility of buying Bitcoins from the Square Cash application, as well as the imminent arrival of Bitcoin-backed futures on the Chicago Mercantile Exchange platform.

He expects these contracts to lead to higher trading volumes in the Bitcoin markets - even if institutional investors will not handle any cryptocurrency.

Finally, he had recently said this in an interview: "We can probably think that this good news is not yet reflected on the current price."

Bullish feelings
Tom Lee Fundstrat Tom Lee, managing partner at Fundstrat Global Advisors, had revised his forecast for mid-2018 from $ 6,000 to $ 11,500 - a price level that Bitcoin had surpassed in the weeks that followed.

As Business Insider said, Lee said the price of Bitcoin would suffer a sharp correction in the near term, adding that "the long-term technical trend [remained] positive."

His optimism was reinforced by the valuation model he created. This is based on Metcalfe's law (which we discussed in this article), which states that the utility of a product or service increases exponentially when the number of people using it increases. .

Therefore, if this law actually applied to the value of Bitcoin, its price could increase much faster than the evolution of the number of people using it:

Mike Novogratz is another famous "bitcoin-enthusiast". As part of the program "Fast Money" broadcast on the US channel CNBC, he said: "Bitcoin could reach $ 40,000 by the end of 2018. It could easily."

He believed that Bitcoin would more than ever emerge as a real currency, thanks in particular to its arrival on the futures markets.

However, like Mr Lee, he expects a potentially arduous journey for the first cryptocurrency, with possible corrections - corrections that could take the form of price cuts of up to 50%.

Here is what he explained at the Cryptovest site at the end of November: "There will be significant 'crash', as we will reach levels well above the current state of technology. This makes the investment very, very exciting, but complex. "

And it was John McAfee's turn
John Mcafee BitcoinThis is perhaps the most bullish observer: John McAfee, founder in 1988 of the software of the same name.

The former presidential candidate had previously said that the price of Bitcoin would reach $ 5,000 in 2017, then the $ 500,000 mark in 2020.

Following the sharp rise in the price of cryptocurrency observed in recent weeks, the whimsical entrepreneur had revised his forecast upwards, estimating that a single Bitcoin could be worth $ 1 million by 2020.

As a decentralized currency and not supported by a government, Bitcoin also provokes a certain craze among libertarian circles. It is for many the dream asset to free itself from the constraints imposed by governments and traditional financial markets. Some also say that Bitcoin could profit from a new financial crisis, by establishing itself as a safe haven for savers.

Tom Price, a financial analyst at Morgan Stanley, explained that Bitcoin has characteristics similar to gold: it is fungible (a Bitcoin is equivalent to another Bitcoin), sustainable (it does not "use" not over time), portable, divisible (a BTC can be divided into 100 million satoshis) and finally, the number of Bitcoins in circulation is limited.

An imminent correction?
Other analysts, although bullish with respect to Bitcoin, nevertheless evoke the possibility of a sharp decline in the coming weeks.

Shane Chanel At the end of last November, while Bitcoin was trading at $ 9,000, Shane Chanel, investment advisor for ASR Wealth Advisers, said cryptocurrency could reach $ 15,000. here at the end of 2018. He explained, however, that bad news could cause "a drastic fall in the short term."

A few days later, he said that a major correction "could bring Bitcoin back to its previous levels of support, around $ 7,500." He explained that it would be "a 20% drop by compared to its current price. "

While predictions of the price of Bitcoin are generally bullish, some analysts now seem to add warnings about a possible correction to their forecasts.

However, on the other hand, some observers are often asked to raise their estimates - and some prices mentioned in this article for the year 2018 have already been largely exceeded, only a few weeks after being presented.

These two antagonistic phenomena seem to reinforce the speculative nature of cryptocurrency, while it is difficult to define its "fair value" - even if it can be compared to assets with similar characteristics, such as gold.

But whatever the opinions are, it seems that fewer and fewer observers are doubting the long-term impact of cryptocurrency on the financial markets or the global economy.

To finish this article, here is an infographic by CoinTelegraph that provides a summary of most of these forecasts on the price of Bitcoin in 2018: