Summary:

• Bitcoin is beginning to show signs of waning momentum after strong surge.
• Nevertheless, despite regaining some ground, current rally unlikely to get it back to 2017 levels.
• Despite high volatility and uncertainty, Bitcoin price forecast bullish, with growth expected over the 2019-2020 period.

“You can’t stop things like Bitcoin. It will be everywhere, and the world will have to readjust. World governments will have to readjust.”

John McAfee, Founder of McAfee

For all of you who prefer to stay within the traditional investment universe of stocks, bonds and commodities, brace yourselves, because now, it’s time for something completely different. We are about to witness the best of the royalty of the exciting cryptoverse at the forefront of finance and high technology, the blockchain wonder of Bitcoin. Or at least that is the way it was – and is, at times – described by some crypto-pundits.

The reality at hand may or may not differ.

So what is Bitcoin?

Bitcoin is the most famous cryptocurrency – a virtual currency (or, rather, a medium of exchange) that is usually relying on strong cryptography and decentralized ledgers to protect transactions, with no central banks to regulate it. This decentralization, as in case with Bitcoin and many other cryptocurrencies, is achieved through the use of the blockchain technology, which is, simply put, the aforementioned distributed ledger, dispersed between hundreds of computers and open to everyone. Bitcoin is a fiat currency, not backed by gold reserves or any other assets, and its circulation is limited through a cap of 21 million coins hard-coded into it. The currency is obtained by mining, which is essentially about solving very complex computational problems, and designed in a way that makes it progressively more difficult to mine new bitcoins.

And since we are talking about what the Bitcoin is, it is also a source of nagging grief for some of those who did not invest in back at its dawn, in the early 2010s, when its prices were minuscule. However, after some volatility and pace-gaining, by late 2017, Bitcoin price surged all the way to the whopping $20,000. And then, as anticipated in this I Know First forecast, it crashed, bounced back shortly, and then crashed once again in a reversal that was as stunning as its rise, dropping all the way to less than $4,000.

After this rollercoaster of a ride, Bitcoin price is slowly crawling back up again, its price currently fluctuating around the $8,000 mark. Some are expecting it to eventually come back stronger than before, reaching a new peak of $25,000, others expect it to only get as high as $10,000 and then, probably, take another nosedive. There are even less optimistic Bitcoin price forecasts out there as well.

Bitcoin Price Forecast: Future Holds Promise

For investors, Bitcoin, as well as the other cryptocurrencies, is a mix of positives and negatives. On the one hand, cryptocurrencies have a bunch of flaws that can drag them down – and that do drag them down, for that matter. First of all, most of them are inherently volatile by the virtue of being a fiat currency with no government to back it up. While that may not necessarily sound too scary at its face value, but consider this. Crypto-currency is in most cases stored in online (quite appropriately called) crypto-wallets offered by various services and traded on crypto-exchanges. Both can be hacked into, despite all the rigorous cybersecurity measures put in place to keep the bad guys out, and every new hack makes the prices stumble. This was the case, for example, in the summer of 2018, when the Coinrail crypto exchange reported being targeted by cyber-criminals, sending the Bitcoin reeling as a result. That said, however, in 2019, Bitcoin has proved to be pretty resilient in its surge.

Furthermore, in case with many cryptocurrencies, the lack of central regulation comes equipped with an increased degree of anonymity, with most transactions being very difficult to trace. This definitely goes hand in hand with the current zeitgeist of a search for more privacy and anonymity in an Internet dominated by the watchful Big Brother. However, it also invites the attention of not just privacy activists, but also of people far shadier, ranging from your regular drug dealers and arms traders all the way to, reportedly, people connected to the North Korean regime, helping it avoid US sanctions and bringing up the number of cyber thefts. This has resulted in an air of criminality shaping up around Bitcoin, and this bad reputation, whether fully justified or not, is probably one of the reasons why cryptocurrencies have not turned more mainstream (and profitable) yet.

On the other hand, however, Bitcoin is a more or less new sphere to explore, and the ever-growing number of cryptocurrencies, each with their own features, leaves ample space for venture investors to step in, while their dangers outlined in the two previous paragraphs are nothing new at this point. Bitcoin has been able to surge beyond belief, and despite the losses, it is currently still high up if compared to its initial value. Can another cryptocurrency replicate its success? Are they really the future of finance, as some pundits and cyberpunks keep telling us? They may be, they may be not, but they still have enough of a pull for people to ask these questions – and invest. Furthermore, as we can tell from the line chart above, it is fairly uncorrelated with the stock market, which can also be seen by some as a positive.

Besides that, we have heard some pundits say that the king of the cryptoverse is unlikely to be anything but that cool district for the hip and the marginalized on the outskirts of the big investment world until big institutions step into the game. On that front, there has been some movement: some are even attributing the recent rebound of the bitcoin to the rise of the institutional demand, pointing at the success of the Grayscale Bitcoin Fund as the cleanest indicator of that. On another positive note, the IMF and the World Bank have launched an educational initiative for their staff to explore the cryptoverse. All this could potentially lead to Bitcoin becoming more mainstream and drawing value as it does so.

Thus, we expect that its long-term value could end up going on a positive trend. This is backed by the current Bitcoin price forecast for a 12-month time horizon by the I Know First algorithm. The signal stands strong at a whopping 379.93, with a predictability indicator of 0.67. This means the algorithm views the crypto king as tremendously underpriced and expects it to surge in the 2019-2020 period.

Those of you with a passion for all things high-tech may also want to look at investing in blockchain. The open ledger technology lying at the foundation of many cryptocurrencies can do more than power these digital assets. Multiple companies are looking at a whole variety of applications for it, including protection of intellectual property, healthcare and cloud services. And while it does not make too much sense to expect it to do things it was not designed to do, whether it is curing cancer or turning water into wine, there are many areas that could genuinely benefit from its application.  So if you want to invest into a brighter tomorrow without having to deal with too much hassle of today, investing in blockchain may be right down your street. Here, depending on your risk tolerance, you can take a look at the blockchain-focused ETFs or, if you want something more risky and rewarding, hedge funds investing in blockchain-based projects.

Conclusion

With the way things are going right now, the most reasonable assumption is to expect an overall upwards trend that is undoubtedly going to be shaken by periods of volatility. However, there is groud to expect the Bitcoin to do well, and the future may be bright for the world’s most famous cryptocurrency.

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Please note-for trading decisions use the most recent forecast.