Must-read cryptocurrency predictions for 2020
Many cryptocurrency predictions aren’t worth the paper they’re written on, but past trends could give us an insight into what lies ahead in 2020
Cryptocurrency predictions can be hit and miss. Year after year, we hear devotees declare that this will be the time that Bitcoin hits $1m. As things stand, BTC is yet to surpass the highs of $20,000 seen in December 2017.
Despite the bluster, there are some interesting insights into what the next big cryptocurrency will be – and analysis that may suggest what the best cryptocurrency to invest in will be this year. Here, we’re going to go through four themes to watch in 2020… and ask: is cryptocurrency the future?
1. One popular cryptocurrency may get even more popular
Instead of wasting our time on pie in the sky predictions, let’s look at some established trends that could have an inflationary impact on Bitcoin this year.
In May 2020, the reward that miners get for verifying transactions is going to be cut by 50 per cent – an event known as "the halving" or “the halvening”.
This happens every four years. On the past two occasions, BTC prices have ballooned in the subsequent 12 months. One Bitcoin was worth about $12 during the first halvening in November 2012 – but ballooned to more than $1,000 a year later. Prices stood at $650 on the day of the second halvening in July 2016, rising to over $2,500 the following summer.
PlanB, a well-known crypto analyst, recently polled his users and asked how the upcoming event will impact BTC prices. The results speak for themselves:
Here’s another interesting prediction from a crypto publication, which has projected future growth based on past halvenings (given how BTC is in a far different place from where it was four years ago, these calculations may prove to be overexaggerated):
Naturally, not everyone agrees – especially Jemima Kelly of the Financial Times. She opined that the halvening will not boost Bitcoin’s price, and warned: “Trying to predict price movements in a market with no fundamentals and in which pump-and-dump trading is rife is a fool’s game. It might rise, but it might fall.”
2. Geopolitical uncertainty could help crypto prices
Here are more cryptocurrency predictions based on recent trends. As we’ve told you before, BTC prices rose by 10 per cent in the 72 hours after the US assassinated a top Iranian general on Iraqi soil. Price rises throughout 2019 also appeared to be linked to worsening developments in the US-China trade war, although some sceptics maintain that correlation does not imply causation.
Even when you bear this in mind, something’s got to be driving the 36 per cent boost that Bitcoin has had so far in 2020. And some analysts believe that without these geopolitical events causing investors to seek alternatives – along with other threats such as the coronavirus – BTC wouldn’t be performing anywhere near as strongly as it is now.
Nigel Green, the CEO of deVere Group, believes Bitcoin’s trajectory will remain in an upwards direction for the foreseeable future. Likening the cryptocurrency to “digital gold” – a nod to how the precious metal is often relied upon during times of turbulence in traditional markets – he told clients: “We can expect Bitcoin’s price is likely to continue to rise until the coronavirus peaks which, according to a prestigious research group in Hong Kong, is likely to be in late April or early May.”
3. Libra will not launch this year
Let’s look at some cryptocurrency predictions away from Bitcoin now, and there are growing fears that a Facebook project touted as the most promising cryptocurrency may never launch at all.
When the social network unveiled the white paper for Libra, many believed it would quickly become the most popular cryptocurrency on the planet thanks to the company's billions of users. However, the stablecoin has faced resistance from governments around the world. America fears it could undermine the US dollar, and has successfully lobbied Facebook to halt its launch until regulatory concerns are properly addressed.
In a quarterly report prepared for investors last summer, Facebook admitted that these hurdles mean they can't guarantee the Libra cryptocurrency “will be made in a timely manner, or at all”. Although the company maintains that it plans to launch Libra this year – in and of itself unlikely given the fact this would coincide with the US election – Mark Zuckerberg has appeared to distance himself from this target.
Some executives in the crypto community, such as Ripple’s CEO Brad Garlinghouse, believe that Facebook hasn’t got a chance of launching Libra by 2023. Others – such as NetSfere chief executive Anurag Lal and crypto analyst Gary McFarlane – think that, even if the digital currency ever sees the light of day, it won’t look anything like the product set out in that ambitious white paper. “Libra will never launch in its current form,” Lal told Finance Magnates.
There are a sizeable number of US politicians who have been tearing their hair out at the roadblocks Libra is facing – warning that stifling innovation in this way will deny America a headstart in this potentially important space. China is chief among the countries who are aggressively developing a so-called central bank digital currency – and expect to hear a lot more about them in 2020.
As Anthony “Pomp” Pompliano, the co-founder of Morgan Creek Digital predicted:
4. Is cryptocurrency the future? Yes
Even mainstream banks are getting in on the act of making cryptocurrency predictions. Interestingly, one of them agrees with Pompliano’s stance that digital currencies are inevitable.
Deutsche Bank predicts that, over the next decade, cryptocurrencies have the potential to eventually replace cash as regulatory hurdles are overcome. As we move towards an increasingly cashless society, its analysts say crypto must achieve legitimacy with governments, tackle price stability concerns and forge partnerships with major e-commerce players such as Visa, Amazon and Apple Pay if they are to unlock mainstream adoption. The relentless number of cyberattacks on crypto exchanges will undoubtedly need to be tackled, too.
A recent report said: “As we look to the decade ahead, it may not be surprising if a new and mainstream cryptocurrency were to unexpectedly emerge.”
So: based on Deutsche Bank’s prediction, an up and coming cryptocurrency still has the potential to steal Bitcoin’s thunder. That coin may have nothing to do with Facebook as it remains bogged down in red tape. And the next cryptocurrency bull run could begin in a matter of months as Bitcoin rewards are halved – potentially boosting the price of so-called “altcoins” too. Irrespective of whether these predictions turn out to be true or false, you’ll want to keep a close eye on the crypto markets for the foreseeable future.
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