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Bitcoin could see an all-time-high (ATH) by the end of 2020, according to financial analyst Bob Loukas. The self-proclaimed ‘cycle trader’ posted his prediction on Twitter, after verifying his prediction of $7K for Bitcoin at the end of 2019.
Bitcoin closing near the $7k area were my thoughts 12 months ago in my first video.
If #bitcoin bull narrative remains true (which I believe), we should see $BTC begin turn higher over next 2 months. Then a solid steady climb towards ATH's by the end of 2020. Exceed in 2021.
— Bob Loukas (@BobLoukas) December 26, 2019
As the year draws to a close, many analysts make their predictions for the coming year. Loukas is no exception. His 2019 prediction for Bitcoin closing in the $7K range proved accurate, creating some stir around his ATH prediction for 2020.
The Bitcoin Narrative
Interestingly, the ‘bull narrative’ that Loukas refers to is a driving force in much of the price prediction data. Many Bitcoin faithful believe that the coin will eventually grow in market cap to extremes.
This position holds that the movement of central banks globally will create economic stagnation, coupled with a strong inflation. As investors liquidate positions in losing equities, they will seek refuge in stable assets that are unaffected by inflation. Bitcoin is one of those assets, often referred to as ‘digital gold.’
Such a narrative sees a steady growth moving forward. While there may be periods of loss, the overall movement will be positive. This movement is driven largely by adoption, as more users enter the Bitcoin market space, increasing demand, and therefore price.
Main Counterpoints
The obvious responses are many. First, the actual use cases for Bitcoin may be far more limited than previously thought. When transaction fees increase, the cost for small payments becomes too great to justify.
Further, the potential for government controls or even outlawing is substantial. The need to have strong controls over financial transactions may push governments to severely limit Bitcoin’s usage. Chinese regulations are a vivid example of this.
Finally, the concern that the market will turn lower first is a real possibility. Even Loukas himself hedges his statements with the potential for bearish trends as well.
In the absolute bear case, after a 6-month downtrend, expect a counter-trend move towards $10k-$11k before another big downtrend. If you think you will FOMO buy $10k then buy it now instead.
— Bob Loukas (@BobLoukas) December 26, 2019
The reality is that, while predictions are sometimes accurate, Bitcoin’s performance for the next year is unclear. An ATH would make Bitcoin maximalists thrilled, but many factors may well affect the outcome.
Additionally, the future of Bitcoin can be affected by a massive number of factors. Global markets, government controls, and user adoption may all create changes in the market that cannot be foreseen. The future, as with every other investment, is anyone’s guess.
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