The Bitcoin goes to $ 100 000 or $ 100
Many predictions have been made about the price of Bitcoin which, after jumping from around $ 1,000 to $ 20,000 in 2019, decreased to lows of around $ 6,000 before rising to $ 8,000.
This enormous volatility makes it very difficult to predict short-term prices. However, a fundamental analysis of the evolution of the Bitcoin price in the long term could be more reliable. Several predictions are analyzed and discussed below to calculate the most likely direction of the Bitcoin price from the medium to long term.
Prediction 1: Money from institutional investors will increase the price of Bitcoin
The CEO of the company backed by American Express, Abra, has predicted that big investors will make all hell break loose in a recent interview with Business Insider. He mentioned that currently there is little large-scale institutional money in cryptocurrencies and that when this changes the impact on the price of Bitcoin will be very positive.
So, what prevents institutional money from flowing in Bitcoin markets and cryptocurrencies in general? The current technological limitations of Blockchain could be a key reason, especially those related to expansion. However, now there are scientists and software developers building pioneering innovations that could take distributed accounting technology (DLT) to the next level, as noted by Don Tapscott, author of the book Blockchain revolution.
Decentralization, scalability and security are the trilemma in DLT, which means that if you improve scalability, security would be compromised, and so on. However, this trilemma, which has been the limiting factor for technology, is about to be overcome.
"Sharding", interoperability and formal verification
Ethereum and Zilliqa are working on a process called "sharding" that could significantly improve their performance and number of transactions per second, equaling or surpassing those of Visa or Mastercard.
Other projects are creating the "Blockchains Internet" for allowing interoperability between Blockchains, both public and private.They also offer shared security and instantaneous firmness, which means that it will not be necessary to wait for several confirmations to validate a transaction.
In addition, hacking attacks such as the one that affected the DAO and triggered the hard bifurcation of Ethereum could become a thing of the past once the formal verification of smart contracts, such as those being used by the Tezos or Zen Protocol projects, will be ensured that there are no errors in the code and, consequently, there was no way to attack it. Formal verification is already used in aircraft, medical equipment and nuclear reactors, places where there is little room for errors.
Xinshu Dong, CEO of Zilliqa, among the first Blockchain to use sharding technology with a public testnet launched on March 31, also recognizes the importance of formal verification of smart contracts:
One of the key issues that must be addressed is the security of intelligent contracts for applications that run on public Blockchains, so that any company running any part of its business in a public Blockchain requires an infrastructure that avoids incidents such as those that occurred. with DAO: Once the security problem is solved, we can see that larger companies are starting to embrace Blockchain publicly, which in turn can act as a catalyst towards institutional investment.
All these technological advances could come soon, potentially solve the "Achilles heel" of Blockchain, which is the aforementioned "trilemma" of decentralization, scalability and security. However, since all these innovations are not yet ready, the vast majority of institutional investors, companies and banks that are waiting for these advances to really jump, are now simply "sinking their fingers."
Once all the aforementioned pioneering innovations are completed and ready, and more countries follow the pioneers in terms of DLT regulation, such as Malta or Switzerland, institutional money could begin to enter. This could increase the price of Bitcoin and reduce its volatility.
Jan Brzezek, CEO and co-founder of Crypto Finance AG, a regulated cryptocurrency fund, master broker and storage intermediary, who previously held various positions at UBS Asset Management, shared his thoughts with Cointelegraph about the rise in the price of Bitcoin in 2019:
It was clearly a hype and FOMO [the fear of missing something] was everywhere. But not from rational institutional investors, but from retail investors chasing fast money. There is no free lunch, so this correction was obvious to me. I even anticipated it before. The investors burned their fingers and are now too scared to return in this new asset class and the expected institutional money has not yet entered.
Prediction 2: A decade from now, Bitcoin is more likely to be worth $ 100 than $ 100 000
Kenneth Rogoff, a Harvard economist, has predicted that, due to the volatility of the Bitcoin price, and the small number of use cases such as money laundering and tax evasion, mainly, in his opinion, it is more likely that Bitcoin roams $ 100 in a decade than $ 100,000.
Rogoff also points out that the Bitcoin regulation is also an important factor in its prediction, although it clarifies that only a coordinated regulation worldwide can be effective. However, given that countries such as Malta are becoming pioneers in the DLT regulation, it seems very unlikely that there will be a global regulation antipathetic to Bitcoin in the future.
Regarding the problem of the volatility of the Bitcoin price mentioned by Rogoff, there are currently many projects to try to solve this problem. Cointelegraph spoke with Alex Gordon-Brander, CEO of Omega One of ConsenSys and formerly of Bridgewater Associates, the largest hedge fund in the world, on what could help reduce the high volatility in the crypto-markets.
Alex wants its platform to become a regulated crypto brokerage agency in order to "provide a high quality of liquidity, allowing the marketing of large sizes without moving the market, saving millions of dollars as well as offering regulatory compliance.
In the United States, we are probably at least a few months away from obtaining full regulatory clarity in the price of digital assets, but the landscape is much clearer than it was before.
Prediction 3: The Bitcoin price will follow a bearish trend after the release of the CME futures in December 2019
A popular cryptoblogger predicted in a recent article that Bitcoin's price will follow a trend based on the assumption that gold and silver prices have been suppressed in the past seven years, similar to other commodities after the release of futures to the market .
The following graphs show the prices of Bitcoin, silver, gold and uranium, and the developments for the futures market start date for each one.
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