What are your Bitcoin predictions for 2020

Bitcoin soaring stopped: will 2018 repeat itself?

Anyone who invests in digital money needs strong nerves, as the past few weeks have once again impressively shown. In the past four weeks alone, the crypto prime Bitcoin has lost almost 30 percent of its value. On April 13, Bitcoin marked a new all-time high at a good 54,000 euros, only to fall exactly one month later on May 13 to a good 39,000 in the meantime.

There are two main reasons why the Bitcoin exchange rate has come under such pressure. For one thing, the Turkish National Bank banned Bitcoin payments in mid-April. On the other hand, the latest statement by Tesla boss Elon Musk caused a price quake. On Wednesday, Musk announced on Twitter that Tesla would suspend payments in Bitcoin until further notice - due to the high power consumption required to produce the digital talers. The price is currently around 41,000 euros.

Increasing Bitcoin demand from institutional investors

The world of Bitcoin disciples was still fine until mid-April. They justified the gigantic price range that the crypto reserve currency had laid down from the beginning of October 2020 with a trend: More and more institutional investors are looking for opportunities to invest in crypto currencies. “The inclusion of Bitcoin in portfolios by institutional investors has only just begun,” wrote analyst Nikolaos Panigirtzoglou at the turn of the year in a study for the US investment bank JP Morgan Chase.

The potential of professional investors seemed to be particularly great, as they had so far largely avoided digital currencies and could now catch up. "Most institutional investors have not yet invested in Bitcoin and those who have invested something are extremely small compared to traditional investments," continued Panigirtzoglou.

Most recently, the US investment bank Goldman Sachs caused a sensation. According to various media reports, Goldman Sachs announced its entry into crypto trading at the beginning of May. The US investment bank wants to offer institutional customers in particular the opportunity to participate in the crypto market with derivatives such as Bitcoin futures. However, the transactions are not carried out in cash and Goldman does not hold the cryptocurrency itself, but rather uses a trading partner on the Chicago Stock Exchange.

Marc Friedrich: "I'm ultra-bullish for Bitcoin" - gold price with price potential of up to $ 10,000

Source: YouTube channel from biallo.de

Ethereum, Litecoin & Co price development since the beginning of the year

According to the provider CoinMarketCap, the market capitalization of Bitcoin is currently estimated at a good 780 billion euros. Until recently, the value of all Bitcoins in circulation was over a trillion euros. That's tremendous value for a single digital currency. Bitcoin is also the oldest and by far the best-known digital currency - it celebrated its eleventh birthday at the beginning of the year.

However, there are many other digital currencies that have also seen an impressive price rally until recently. Ethereum is one of the best-known: The second largest cryptocurrency currently has a market capitalization of a good 385 billion euros and can also shine with an impressive development. The value has increased more than tenfold since October 2020.

The crypto currency Polkadot started again in summer 2020. Since then, it has increased its value from seven euros at the beginning of this year to a good 34 euros. Polkadot is currently in ninth place with an overall valuation of around 31 billion euros. The concept of Polkadot is to enable a connection of individually adapted sidechains with public blockchains. This possible integration of different blockchains is meeting with demand and driving up the price.

Litecoin was also able to post a hefty price gain. The crypto currency has more than doubled its price since the beginning of the year. The crypto currency XRP Ripple, which is oriented towards banks and international payments, has also shone with a decent performance since the beginning of the year. While the Ripple price was 0.15 euros on January 2, it is currently 1.15 euros - an increase of more than 600 percent.

Bitcoin forecast for 2021

With a few exceptions, the largest cryptocurrencies all showed strong growth until mid-April. However, the Tesla stop recently caused great disillusionment. But what's next for the Bitcoin price - are the recent price setbacks the beginning of a big crash like in 2018 or just a short breath for new highs? The fact is: the upward trend of the past few months has been broken down. That could cause further price pressure in the short term. The next major support is only in sight at well over $ 40,000.

Memories of the gigantic price rally in autumn 2017 and the subsequent crash are currently being awakened: At that time, the Bitcoin price rose within just three months from 3,000 to almost 20,000 US dollars by the end of 2017 and then fell again to around 3,200 US dollars by the end of 2018. Dollar off. The minus was more than 80 percent at the top. So anyone who thinks that the current development is only a correction should definitely be warned.

Nothing seems to divide the financial world as much as Bitcoin at the moment. For some market participants, Bitcoin is the new gold, others see a big bubble through the cheap money of the central banks. "For me, Bitcoin is not an investment vehicle, but a pure narrative, a highly contagious one at that," warned Hans-Joerg Naumer, Head of Capital Markets and Research at Allianz Global Investors, in a market study at the beginning of January Shiller ("Narrative Economics"), who warned of a large Bitcoin bubble in September 2017 and drew parallels to the "tulip mania" in the 17th century.

Bitcoin disciples such as bestselling author and economist Marc Friedrich, on the other hand, are indifferent to the recent price slump. "I'm ultra-bullish for Bitcoin," said Friedrich in a YouTube interview with biallo.de at the end of April and even considers six-digit rates to be possible in the current year.

The future will tell which camp is right. It is quite possible that there will be another price fall like in the spring of 2018. Investors who are just jumping on the bandwagon could be disappointed, at least in the short term.

Kevin Schwarzinger
* Advertisement: Links marked with an asterisk (*) are advertising links. If you click on such a link, buy or complete something, we receive a commission. There are no additional costs for you and you support our work.