Last year we published our astonishing Bitcoin price forecast of 160,000 USD. Is this price forecast still relevant after the crypto crash? This article features our Bitcoin price forecast for 2019.
Since last year when we wrote our $160,000 forecast for Bitcoin really many things changed in crypto land. First and foremost, Bitcoin has matured as an investment vehicle, primarily with the introduction of Bitcoin futures. Second, the crypto crash brought a great level of cleanup, and, considerably, changed the dynamics in the crypto market. Third, we start seeing a trend in the type of Bitcoin ETFs that are submitted to the SEC, which, according to us, delivers an important insight.
That said, we can revise our previous forecast, and add lots of new insights to derive an up-to-date Bitcoin price forecast for 2019.
Our previous Bitcoin price forecast of $160,000 still accurate?
The short answer: we do not see Bitcoin rise to $160,000 anytime soon. It may be a very long term target, potentially, but not by 2020 or 2022 which was the timeframe we used when we published this Bitcoin price forecast.
One of the most important reasons for this is the introduction of Bitcoin futures. This allows large investors to put pressure on Bitcoin’s price in a way not seen before. In other words, the introduction of Bitcoin futures on December 17th 2017 resulted primarily in subdued returns to Bitcoin going forward.
Moreover, with so many Bitcoin ETF proposals submitted to the SEC this year we start seeing a trend that is somehow concerning for our Bitcoin price forecast. As said, a physical Bitcoin ETF was rejected in April of this year. On August 22nd the SEC decided to reject 9 more Bitcoin ETFs. As per Bloomberg:
“The nine ETFs denied this time around came from three sponsors: ProShare Capital Management, GraniteShares Advisors and Direxion Asset Management. All of these funds sought to use futures contracts to get exposure, with several planning to short Bitcoin. The regulator had a hard-deadline to deny or approve all of these products over the next month; their requests to list had been pending since December and January. Investors’ hopes for a Bitcoin ETF now rest on just one fund from VanEck Associates Corp. and SolidX Partners Inc. The regulator this month pushed back a ruling on that product until at least September and could ultimately take through February to make up its mind.”
What we see is an emphasis on non-physical Bitcoin ETFs. The ETFs that are submitted are primarily derivatives. They can go short, or are correlated to Bitcoin futures. We don’t like this, at all in fact. Only physical Bitcoin ETFs are good for the Bitcoin market, derivatives bring a market to another state.
On the flipside, however, institutional investing is likely going to enter Bitcoin in 2019. Think of the Bakkt platform as well as the Nasdaq offering cryptocurrency investing to institutions. That’s a positive.
All in all we believe increasing derivatives in Bitcoin’s market will put pressure on returns. The $160,000 Bitcoin price forecast which we did set by 2022 is not realistic in current circumstances.
Bitcoin price forecast vs. Bitcoin usage
As per the Bitcoin usage and adoption statistics on Statista.com the ownership of Bitcoin is still very low, slightly but not much higher than when we wrote 10 Investment Tips For Cryptocurrencies Investing 18 months ago.
The 3 stats shown below, however without precise figures as that’s only available for premium members, show that Bitcoin ownership was very low in the U.S. amid an amazing Bitcoin price rise, willingness to use Bitcoin for transactions is significant (equally spread yes, no, neutral answers) and the shares of U.S. adults planning on investing in Bitcoin is clearly a phenomenon for the younger generation which probably crypto a product of ‘their’ digital age.
Moreover, when it comes to Bitcoin ATMs worldwide, we see a stagnation in the last few months. This is the first sign of stagnation. It suggests to us that the idea of using Bitcoin as a payment method is being challenged right now. With the advent of stablecoin we believe Bitcoin has a serious competitor for payments and transactions.
Bitcoin sets the primary trend for crypto and blockchain investments
What we believe is happening with Bitcoin in the crypto market can be summarized wit the following points. This, of course, is critical information for out Bitcoin price forecast for 2019.
- Bitcoin as an investment is maturing, with futures being introduced already and other derivative products coming online in 2019 and beyond.
- Bitcoin adoption as a medium for transaction is not likely going to continue. Bitcoin does not have the mandatory features of a payment method. That’s why the number of Bitcoin ATMs worldwide starts stagnating.
- Primarily the young generation is open for Bitcoin usage as they consider it a product of their age. The older generation is skeptical.
That said, and as per InvestingHaven’s blockchain & crypto investing research, Bitcoin evolved already early this year into the leading indicator for the crypto market. We started writing about this already in February, as the crypto crash was going on. Many crypto investors made a big mistake by focusing on the wrong indicators for the crypto market. We told our premium crypto subscribers countless times to focus on Bitcoin, and its chart structure, in trying to understand how the crypto market will shape out.
We believe that Bitcoin will only function as the leading indicator for the crypto market, setting the high level direction, per its chart structure. Nothing more, nothing less.
Obviously, if this is true, it yields critical information for any crypto related investment, not only cryptocurrencies but also blockchain stocks.
Our Bitcoin price forecast for 2019: $25,000
With all the insights laid out in this article can we do a Bitcoin price forecast for 2019? Yes, is the answer, and our annotated long term Bitcoin price chart should help us with this.
Below is the 4 year chart of Bitcoin. It shows a perfect long term channel with 4 bands. Note that Bitcoin never fell into its ‘support band’, implying there was still plenty of downside potential before the long term bull market would be over. This certainly is not how crypto investors felt about it, on the contrary.
Bitcoin is now trending in its ‘transition band’, since May of this year. We believe that the ‘transition band’ will be the one in which Bitcoin will trade most of the time. Arguably, when the next strong period of momentum in crypto land starts, Bitcoin will move to its ‘bullish band’. But with all insights laid out in this article we don’t see Bitcoin going to its ‘super bullish band’ though.
That’s why we believe that it is very realistic to expect $25,000 as a realistic Bitcoin price forecast for 2019, assuming the crypto crash is over. Previous all-time highs will be taken out, but we believe Bitcoin will trade within its ‘bullish band’, not higher.
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