With the price of Bitcoin down 63% from its December highs, signs the cryptocurrency will regain those highs have been few and far between.
But a new Bitcoin price prediction chart from Wall Street research firm Fundstrat suggests BTC will get back to those highs and beyond, reaching $36,000 by the end of 2019.
Fundstrat isn’t shy about creating its own Bitcoin market indicators and has a reputation for bullish Bitcoin predictions.
Back in January, Fundstrat analyst Tom Lee set a Bitcoin price target of $25,000 for 2018 and a long-term target of $125,000 by 2022.
The latest from Fundstrat is a chart based on the breakeven price for the Bitcoin miners. It’s the point where the miners can make a profit after covering for their expenses, like mining rigs and electricity costs.
By plotting the chart all the way back to 2013, Fundstrat discovered a pattern that suggests a fivefold increase in the price of Bitcoin over the next 19 months may be too conservative…
The High End of This Bitcoin Price Prediction Is $64,000
This chart is based on the idea that multiples of the breakeven price for the Bitcoin miners create an approximate channel for the trading price of Bitcoin.
Take a look at just how accurate those price channels have proven to be, as well as what that means for the future price of Bitcoin…
The lower bound of the channel is the point where the trading price of Bitcoin matches the breakeven price for the miners, seen on the chart as 1x.
The center of the channel is the historical average of this ratio, which has been 1.8x. In other words, Bitcoin historically has traded at 1.8 times the breakeven price for the miners.
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Despite the steep drop in the Bitcoin price over the past five months, the price is still very near this middle line – just about where it should be. The chart suggests last fall’s price spike was indeed a bubble bound for a much-needed correction.
The upper bound of the channel is 3.2x. Fundstrat Head of Research Sam Doctor based this on the standard deviation. For the most part, this line has served as an upper bound on the Bitcoin price.
Over the past five years, the chart’s channels have been surprisingly on target – a good sign for the forward projections, which reflect trends we’re seeing in Bitcoin mining.
Doctor expects hash power – the measure of the computing muscle used in Bitcoin mining – to rise 350% by 2019. That will require heavy capital expenditures by the miners to keep up, raising the breakeven price as the chart predicts.
That’s good news for the price of Bitcoin.
“We believe the current path of hash power growth supports a BTC price of about $36,000 by 2019 year end, with a $20,000-$64,000 range,” Doctor said in his report. The top and bottom of the range are projections of the upper and lower bound lines (the 1x and 3.2x lines).
The historical average line (the 1.8 line) suggests a price of $36,000. That’s nearly five times the current BTC price of $7,300. The upper limit of $64,000 represents a potential gain of 777% over today’s prices.
But as Bitcoin price predictions go, $64,000 is on the low side. Several Bitcoin price forecasts made over the past year have set the target much, much higher…
Long-Term Bitcoin Price Forecasts for $100,000 and Beyond
The prediction based on the Fundstrat chart is pretty much in line with other near-term Bitcoin forecasts for the next year or so.
For instance, the May consensus of Bitcoin forecasts on Finder.com puts the BTC price at $23,278 by the end of 2018.
But the numbers get much higher for predictions with a longer time span. Remember, Fundstrat’s Lee has a target of $125,000 by 2022.
Venture capitalist Tim Draper is twice as optimistic as Lee. In April, Draper said he expects Bitcoin to hit $250,000 by 2022. Draper famously bought 30,000 bitcoins in 2014 in a U.S. Marshals Service auction.
Cameron Winklevoss, a co-founder of the Gemini Bitcoin exchange along with his twin brother Tyler, predicted in February that the Bitcoin price would reach $320,000 in 10 to 20 years. He based that on Bitcoin eventually rivaling gold as a widespread store of value.
Likewise, independent analyst Ronnie Moas of Standpoint Research has a long-term target of $300,000 to $400,000. Moas argues that Bitcoin’s scarcity – only 21 million will ever exist – combined with rising demand will drive the price higher.
But Bitcoin could get to six figures a lot sooner than even these forecasters think thanks to a catalyst that’s looming just on the horizon…
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