This writing's title begins with 'current' rather than 'common', since sense is often not. WARNING: this is in no way price - analysis, or investment advice. I'm not going to try to visually transform a minute possibility into a grand probability with the aid of eye-impressing trade charts (though nothing is wrong with using those: they can be helpful, even future-revealing, or completely wrong). Simply, I will tell you why I strongly believe Bitcoin (BTC) will not see $50-, $35-, or $25k this year. To some this article will seem counter-intuitive and perhaps grossly ignorant of both technical and fundamental market analysis. And I'll quickly agree with those sentiments. To the typical *BTC-watcher, it might appear that I'm taking a Drumpf-like stance to *King Coin, shamelessly ignoring reality while loudly claiming the opposite. I plead with you to drop all asstrumptions and forget the charts; forget the mass-adoption that is, in fact, taking place; and consider this crypto-noun, perhaps originating somewhere in Crypto-Twitter:
hopium.
Yes, hopium. Say it slow, breathing it out gradually to get the effect. Ah, hopium. As in opium, of course. A vice regarding which I am completely uninitiated in the literal sense, but all too familiar with, figuratively, as it relates to King Coin. Hopium, for those out-of-the-know, can be defined as communicable, communal exhilaration regarding the upward potential price of bitcoin, or any other crypto (or non-crypto) asset. Hopium renders all wise market analysis useless because those who have inhaled - figuratively, of course - will only and always see in the charts that which they collectively agree to be true: that bitcoin is due to *moon, and soon (*skyrocket in price. If you've been on Crypto-Twitter or anywhere else uncouth coin-promotion thrives, you've seen the iconic emoji below).
Hopium would be more obvious if the price of said moondom were agree upon. But, alas, no. So that $50k by December 2020; $100k sometime in 2021; or $20k next week (big LOL) are all examples of this asset-based illness. It's like expecting multiple Os from your partner when their record is 1/1; a well-earned and spent O per rendezvous. But you still love them. NOW you understand BTC maximalists (there is, in fact, such a thing). And you get NY Knick fans. So, as the clouds from a pipe, hopium obscures reality and the wisdom that might come from honest evaluation of it. REALITY is that bitcoin's fullest moon occurred in December 2017, and it is now an undisputed fact that such moon-ing was manipulated by way of a fellow crypto-asset, Tether [NOTE: diabolic as a duo, BTC-Tether is certainly a topic worthy of research, should you, dear reader, choose to undertake it]. Also in December of that year, the CME - Chicago Merchantile Exchange - introduced bitcoin futures to its market. Recent history of Gold shows clearly that futures have a negative effect on the market of their underlying assets. Some industry experts even suggest that futures were introduced as a legal method of price-manipulation. And, so, there you have it. As surely as W stole the 2000 US election, King Coin's meteoric rise three years ago was fake (and real at the same time, if you get what I mean. The next sentence should make it clear). Bush became President when he really shouldn't have, and BTC 'mooned' when it really didn't. That brings me to my next point.
ORGANIC GROWTH CANNOT BE PREDICATED UPON MANIPULATED GROWTH.
The 2017 moonward manipulation of bitcoin is a fact not only of crypto but traditional markets. Assets get manipulated. Think of it as financial massage, but where those with least assets get squeezed most. So, market manipulation doesn't get me. It's the illegitimate comparison of organic growth to inorganic growth that gets me. Manipulation, as common as it may be, simply cannot and should not be counted as organic growth. It's not even apples and oranges, it's apples and grocery bags. So, FOR THAT REASON I choose to speculate about what bitcoin's price might have been, sans manipulation. There are two ways to do this, and for purposes of brevity, I'll do the second way. The first way is to use a computer to calculate bitcoin's possible organic price just before, during, and after it's Tethered manipulation. I live in NYC, and recently found out about the Mannahatta Project, which is an endeavor - completed I think - to recreate Manhattan Island without the countless changes made since the Dutch settled. That recent project took 10 years on high tech computers. So I can imagine a restructuring of the possible true price movements during and for a while after (I'll explain) bitcoin's balloon-to-the-moon era would be, by comparison, quite simple and of much shorter duration (a season, perhaps?).
Specifically, just before Dec 2017 to Q1 (first financial quarter) of 2019 (yes, '19) would be the time-chunk I'd look at, if I were to attempt to simulate BTC's organic price-action. I'd allow for a wide-range of error, of course, since speculating on such a massive degree, but I think such an endeavor would yield great insight into King Coin's true character. Why as late as Q1 '19, you might ask? Because the come-down, although not (as) manipulated, was a reaction to inorganic price-movement. And would that first huge down-spike early in 2018 (see any good 2018 BTC price-chart or just take my word for it) have happened as drastically without those CME futures?
The second way to speculate about bitcoin's price-action is way easier: I'll just guess. I'll say, quite simply, and undoubtedly with many disagreements, that bitcoin would never have gone as low as it did in Q4 of 2019, to a staggering, stuttering $3k, if it hadn't 'illegally' gone to $20k. IT TOOK BTC LITERALLY A YEAR TO RECUPERATE, FOLKS. Was the 'down' worth the 'up'? An emphatic NO, I'll say. Then again, I wasn't one of the chosen who *hodled bitcoin before and during those heavenly days of its peak price in late 2017. [*Not a typo. 'hodl is bitcoinese for hold. Don't look at me - I don't amke these things up]. So I see early 2019 as King Coin's return to organic growth. True, there have been manipulations since then, but nothing close to the massive fake-moon of winter '17.
MANIPULATION IS THE REASON I DON'T SEE BTC MOONING
The reason, and the only reason, I don't see BTC mooning is manipulation, both upwards (late 2017 as best example) and downwards. The first is much more dramatic and attention-getting, but the second - downward price manipulation - is just as newsworthy, since it's even more debilitating to price yet infinitely more subtle. Bitcoin has been kept down, I believe, for quite some time. Otherwise, organic growth would have pushed BTC above $20k to easily $30k right now, in my opinion, with reasonable expectation to increase steadily, commensurate with the rise in adoption it has enjoyed. Case in point: in June 2019, when bitcoin was at a the new ATH (all time high) of $14k, much of this progress resulted, I believe, from organic thrust. Then King Coin suddenly fell, ending up staggering in the gutters of a mere $5k. What happened? Adoption that year was steady. Big names who had previously trashed the Big Coin were turning their heads, BTC signs gleaming in their greedy eyes. 2019 was the year of adoption for bitcoin, and 2020 has seen nothing but the aggressive continuation and multiplication of that trend, culminating momentarily in top hedge-fund Grayscale's crypto-promotional ad campaign (have you seen that ad? It's pretty good, I'll admit, for a CeFi - centralized finance - company). I could go into more detail regarding more unexplainable BTC price-action in the face of exponentially-growing favorable opinion, but all would simply add up to a paraphrase of this paragraph's opening statement:
The King is being held back.
And it's for that reason I'll allow myself to predict the following: bitcoin might see $20k next year but wont hold it. Perhaps by 2022, it will.
EXCEPTIONS
We always have to allow for exceptions, especially in speculative adventures such as cryptocurrency. Having made my humble BTC price-prediction a few sentences back, I have some caveats. I will say, regarding the United States, that:
1. In the event of drastic fiat devaluation here, we might see a spike in BTC to $20k as fiat-flight ensues.
2. I don't know what the upcoming US Presidential election (3 days as of this writing!) will mean, either way, for bitcoin and the world of crypto. But I believe BTC will react. Especially if the Stock Market does. And history, namely the infamous election of 2000, showed that the Market reacts very unfavorably to contested elections. Trump vs Biden certainly has the air of becoming a contested election. In 2000, a major Stock Market index called the S&P 500 dived nearly 18%. So current and common sense dictate that such will happen again; but to what degree is a mystery. Regarding bitcoin, it's 11-year existence has shown that King Coin is *increasingly correlated with the S&P 500 and with Gold. Familiarity breeds contempt might be apt here, since BTC, ideally, is a hedge (a protection, typically financial) against the market. But the COVID-19 global pandemic revealed quickly and without doubt that bitcoin is *sleeping with the enemy. That makes it more predictable and, hence, 'likeable' as an investment, but a traitorous hedge. If the S&P falls this (most likely contested) election, King Coin will fall with it. How much, who knows. But a rational person cannot expect the correlation pattern that has been solidly established this year to be abandoned by bitcoin in three days.
SOME THINGS FOR YOU, YES YOU, TO LOOK UP, IF YOU FEEL (OR MIGHT FEEL) INCLINED TO DO SO
~ What really caused bitcoin's spike to $20k in December, 2017?
~ Since their introduction to the market in the 1970s, how do Gold futures affect that asset's price?
~ [My favorite] What's up with BTC-Tether? Or, re-stated: How has Tether been used to affect bitcoin?
~ How do stock markets react to elections? Btw, bitcoin has only seen 2 US Presidents - not enough historical data. But there's plenty of evidence showing how BTC relates to the stock markets.
A FINAL Q FOR YOU:
~ What do YOU think the price of bitcoin will be by New Year's Eve of 2020?
Thanks for reading. And extra thanks for answering.
- Guy
