This Bitcoin bull run will last until at least the second half of 2021, according to the majority of panellists on the personal finance comparison site, Finder.com’s, quarterly Bitcoin Price Predictions report. Forty-seven panellists were polled, including Bitcoin Developer, Jimmy Song, CEO of Coinmama, Sagi Bakshi and senior lecturer at the University of East London, Iwa Salami, to discuss the reasons behind Bitcoin’s 2020 rally and what’s in store for the digital coin.
The panel accurately predicted BTC would crack USD$20,000 by the end of the year, with an average December 31 forecast of USD$20,102. While the BTC bull run could last until the second half of 2021, half of Finder.com’s panel say the bull run will be followed by a sharp drop.
Bitcoin bull run expected until 2H 2021
Over half (58%) the panel says the current bull run will last until at least the second half of 2021. However 52% of the panel says BTC will see a sharp drop from its new peak valuation.
On average, the panel of 47 experts and fintech leaders expect Bitcoin’s value to more than double by the end next year to $51,951 per BTC. Similar numbers say it is a good time to buy or hold, 46% and 43% respectively, with 11% saying it is time to sell.
When asked if the short-lived peak valuation of BTC in 2017 could repeat itself now, around half the panel (52%) thought Bitcoin will see a sharp drop (of 50% or more) from it’s peak valuation at the end of this bull run, with the other 48% saying it wouldn’t be this steep.
Increased regulation of Bitcoin still a threat
Over a third (36%) said increased regulation could cause the rally to come to a halt and over a quarter (27%) said a share market drop would hurt Bitcoin’s price, many suggesting this would cause investors to sell cryptocurrency in favour of cheaper shares.
Bitcoin developer Jimmy Song, who believes the bull run will last until the final quarter of 2021, says both supply and demand is driving the rally: “The halving caused the supply to decrease even if demand stayed the same, that would explain why the price went up. Demand has gone up because of the insane money printing, so the combination has led to a pretty nice price rise. I expect the supply shock to continue in 2021.”
A number of panellists, including CEO of Invest Diva, Kiana Danial, also noted that a strong valuation will cause Bitcoin ‘whales’ to dump the coin.
“Bitcoin’s medium-term movements are mainly psychological and market sentiment based,” she said. “When there’s hype, everyone buys and then the whales dump and the rest of the retail investors get nervous too, causing a crash. Bitcoin price action has been this way since 2011.”
Panel accurately predicted Bitcoin 2020 surge
The panel accurately predicted BTC would crack USD$20,000 by the end of the year, with an average December 31 forecast of USD$20,102. The leading factors behind the 2020 rally include large-scale public investments from firms like MicroStrategy and Square (cited by 72% of the panel), Paypal’s announcement that it will allow customers to hold Bitcoin (72%), large scale quantitative easing by central banks (66%) and a general sentiment shift and increased acceptance of the Bitcoin narrative (66%).
The rally is being driven mostly by institutional investors according to 72% of the panel, with 17% arguing it’s being driven mostly by Bitcoin ‘whales’ and 11% retail investors.
Crypto hedge fund managing partner Gavin Smith, who predicts BTC will end the year at US$20,000, said Bitcoin will increasingly be used as a hedge against fiat currency by both institutional and retail investors:
“Bitcoin is now being used as a hedge against fiat money printing by early adopters in both retail and institutional sectors. This trend is expected to continue. We don’t believe this will be an uninterrupted move higher, we expect the market will exhibit high volatility to both the upside and downside but with a clear bias to higher levels,” he said.
Finder.com Founder Fred Schebesta gave an end-of-year forecast of $17,500, saying he expects the cryptocurrency market to cool off. “The Bitcoin (and broader cryptocurrency) market seems to have entered a period of cool-down,” he said. “While there doesn’t seem to be any slowing of institutional adoption that drives longer term interest, it does feel reasonable to see it trade sideways or down into the first few months of the New Year. If it does, it provides a stronger foundation for the period of growth many hope to see come into play.”