Bitcoin (BTC) has been slow at surging above $4,000 although it has also managed to maintain its position there. This has made it hard to tell if it will be going up or down the next minute. However, a renowned analyst has projected that BTC will hit $55,000 by 2020 when the halving of its total supply will occur.
The analyst known as Plan B said this based on a prediction model he used to model Bitcoin’s value against scarcity. Like in any other case, the model suggests the price of Bitcoin will go up when the halving occurs that will increase the scarcity of the asset.
Bitcoin was the first cryptocurrency to be created in 2009 and is currently the biggest cryptocurrency by market capitalization. At creation, the total supply was set to a limit of 21 million coins and miners can only mine the 21 million and nothing more. This spells an imminent end to the churning out of new coins through mining which means scarcity is inevitable.
The projected price is due to a corresponding projection of a $1 trillion market cap for Bitcoin in 2020 which many wonder how this is possible. Plan B has this to say:
“People ask me where all the money needed for $1trn bitcoin market value would come from? My answer: silver, gold, countries with negative interest rate (Europe, Japan, US soon), countries with predatory governments (Venezuela, China, Iran, Turkey etc), billionaires and millionaires hedging against quantitative easing (QE), and institutional investors discovering the best performing asset of last 10 yrs.”
There have been other predictions this year but not have been as bold as Plan B’s own. Fundstrat’s Tom Lee earlier this month said Bitcoin may need 5 to 6 months to make any tangible upward movement out of the bear market. Some Fintech experts also predicted an 84% rise for Bitcoin in 2019 but none see any spectacular move before year end.
Plan B’s prediction, therefore, may be taken with a pinch of salt as the current trends do not suggest such a price is possible by next year. He is still optimistic though, “I guess time will tell and we will probably know one or two years after the halving, in 2020 or 2021”, he said.
Bitcoin is currently trading above $4,000 but it has always made a move downward following a short time on the $4,000 support. There is so much optimism that it will soon break through and enter a bull run but fingers remain crossed until the bull run comes.