That the Bitcoin price will reach $ 100,000 – $ 200,000 in the next 12 months is a fairly common, if not “conservative” prediction. But if these are already being labeled as conservative, which price targets are more realistic?
While one is undoubtedly “in for the technology,” the most popular and hotly debated topic remains the price of Bitcoin (BTC) and speculation about its future value.
Bitcoin price is currently in a bull market cycle, up over 200% since the beginning of the year and outperforming pretty much everything else in 2020, with the exception of a few stocks like Tesla. But this rally seems to be different from the one from the end of 2017. On the one hand, the all-time high has definitely been broken and, on the other hand, it is primarily institutional traders who are accumulating, while the public is still largely sitting on the sidelines and watching.
A flood of money and credit plays into the hands of BTC
Six-digit price forecasts for Bitcoin are becoming increasingly common in this bull cycle, with central banks’ accelerated monetary expansion being the main driver for such assumptions.
In fact, billionaires and long-established investors like Ray Dalio are starting to warm to the idea of Bitcoin alongside gold. BTC is increasingly perceived as an opportunity to diversify against what Ray Dalio calls, for example, “the depreciation of money”. On Reddit , the economist warned readers there with the following words:
“We are in a deluge of money and credit that is raising most asset prices and distributing wealth in a way that the system we believe is normal cannot and is a threat to the value of our money and credit.
Why does that play into the hands of the valuation of BTC? Quite simply, because apart from the fact that Bitcoin was conceived as a deflationary monetary good in the future, the Bitcoin price is mainly measured in dollars. Ray Dalio puts it like this:
Most likely, this tide will not recede, so these assets [like Bitcoin] will not go down when measured in the decreasing value of money. It is important to be well diversified, both in terms of currencies and countries, as well as asset classes.
Will Bitcoin Price Reach $ 100,000- $ 200,000?
Mark Yusko, the CEO of Morgan Creek, believes the Bitcoin price could exceed $ 100,000 over the course of the next year. This estimate reflects the forecast of the popular stock-to-flow (S2F) model, which its creator PlanB says BTC is still on the right track. Last month he repeated that he no longer has any doubt that the Bitcoin price will reach $ 100,000 by December 2021 due to a “supply shortage”. Last month , he tweeted about this:
People ask if I still believe in my model. To be clear, I have no doubt that Bitcoin S2FX is correct and that Bitcoin will hit $ 100,000-288,000 before December 2021.
Is $ 200,000- $ 300,000 a “conservative” forecast?
The price of BTC has done an insane rally this year with a good 300%. Still, Bitcoin price predictions of around $ 200,000 by the end of 2021 assume that the leading crypto currency will far outperform this successful year. Because in order to achieve this price target, measured against the current price, BTC will have to add a further increase in value of a good 700%. That’s quite a lot!
Nevertheless, this price prediction even seems relatively tame when we compare it with the Bitcoin price predictions of other analysts. For example, popular on-chain analyst Will Woo says he’s seeing more evidence of “hodling” this time around, as well as dwindling supply of BTC on the exchanges as a result of the aforementioned inventory shortage.