When it comes to a Bitcoin price prediction, you can never be too cautious.
After all, any sort of forecast on the evolution of cryptocurrency prices is at the very best an educated guess. There’s still no software or analyst that can predict market movements accurately.
Moreover, if someone could actually correctly predict the Bitcoin price, the cryptocurrency market would immediately lose much of its purpose.
That doesn’t mean a Bitcoin price prediction is useless though. Many predictions are guidelines that can help traders and even influence the market for short periods.
From zero to one million
Bitcoin has had some wild periods since its launch 10 years ago, and conditions are still far from stable. Its volatility and price fluctuations continue to keep investors and traders on a knife-edge. Moreover, Bitcoin’s changes seem to influence the entire crypto market. This makes things even harder for people who own digital assets.
Thousands of investors and cryptocurrency owners are trying to make the next accurate Bitcoin price prediction to profit from it. Some even come up with what appear to be outlandish statements.
At the beginning of 2019, for example, top crypto investor Jeff Schumacher, founder of BCG Digital Ventures, caused quite a stir when he predicted that the Bitcoin price would go to zero.
This type of statement is hard to believe when the price is stable or on a bullish breakout. Yet, people still analysed every word of it for days and months in search of clues that could point them to better investments.
At the opposite extreme, there are the investors and analysts who still bet everything they own on Bitcoin. Last year, John McAfee made a $500,000 Bitcoin price prediction. Later on, he changed his mind, and now sustains that Bitcoin will reach the $1,000,000 milestone by the end of 2020, despite the recent price drop.
Ignore this drop in Bitcoin's price. I am firmly with Peter Brandt in his medium term $50k price prediction. I am also firm on my $1 mil price by the end of 2020. Stop wringing your hands! Watch GOT reruns, or woo your spouse or finish off your drug stash. All is well. pic.twitter.com/gMFdLaVkQc
— John McAfee (@officialmcafee) September 30, 2019
McAfee isn’t the only one to dream big for Bitcoin. In 2017, businessman and entrepreneur Jeremy Liew also mentioned the $500,000 mark – but for 2030. Argentinian mogul Wences Casares also believes that Bitcoin price could reach $1,000,000 in the next 10 years.
How reliable is a Bitcoin prediction?
Investors who forecast the fall of Bitcoin, as well as those who expect its price to hit $1,000,000, seem to know the market pretty well. Moreover, all of them support and invest in cryptocurrencies and blockchain projects.
But when one Bitcoin price prediction varies so much from the next, how do you know which one is more likely to happen? Well, you don’t. Even if a past Bitcoin price prediction came true at some point, there’s no guarantee the person who made it will nail it once again.
Predictions can only give you some clues on market trends and the general feeling of other investors, but that’s pretty much it. Market evolution is random whether you trade stocks, financial assets, goods, or cryptocurrencies. So, any prediction is reliable until it isn’t any more.
The crypto ecosystem, like any other financial market, depends on too many variables to permit accurate predictions. From political decisions and new crypto-products being launched to psychological factors – anything can impact the price of cryptocurrencies.
These are all circumstances impossible to control and, even if you could foresee an event, that doesn’t mean you can predict all its long-term effects.
What predictions can do is change the price for brief periods. If more analysts and market observers predict better returns, for example, demand tends to grow, and the price automatically goes up. However, these are momentum effects with no impact on the price evolution in the long run.
Follow everyone, trust no one
Predicting the prices of Bitcoin and altcoins is one of the most challenging things to do. The internet abounds with forums, software, and trackers that claim to have the correct answers and help traders.
However, there’s no guarantee in this regard. Sure, these tools can help, but they don’t eliminate risks. Every prediction should be used with caution, especially when trading highly volatile assets such as Bitcoin.
As a guideline, you should follow as many investors as you can, as well as read the news and listen to analysts. This way, you can get a feel for various opinions and facts and make more educated guesses. And remember, you should never ignore the risks nor invest more than you can afford to lose.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.