Hey, what’s up, guys. Bitcoin finally broke about $10,000 and it stays about that level. In this article I will explain why it is important for Bitcoin to stay about $10,000. Then we will see bitcoin price prediction 2020 and beyond.
Let’s take a look at the bitcoins price. It’s doing relatively well. A few days ago it sept its recent highs of around twelve thousand dollars a coin. Then out of a sudden in dipped the current price of slightly over eleven thousand bucks. Don’t let the small dip scare you away. It’s just part of the game. We just have to keep moving. I think this is just the beginning of the bull market run.
As Bitcoin broke out of its long down-trending resistance line from the back since 2017. Can it dip again? It’s possible but fundamentals are on our side. Fat is printing like there is no tomorrow and likely to continue to print even more.
U.S. dollar loses its purchasing power as USD index drops. Last time we saw us dollar in that such a low level back in 2018. Precious metals such as gold and silver making new 9-year highs for gold. It’s a new all-time high. Gold broke out Its $1900 resistance level from back in 2011. So I see no reason why bitcoin would not go any higher from here. Fundamentals and technical confirmation screaming and telling us that we are indeed in the bull market.
In the past, we have seen three times with bitcoin broke out above sentimental $10,000 price target. The first one was back three years ago back in November 2017 when bitcoin not only broke out $10,000 level but also reached close to $20,000 which are still till this date remains an all-time high.
The second time bitcoin broke out about $10,000 was in June 2019 around one year ago and the third time as actually in 2020 right before the virus took the entire financial system into a deflationary state.
So now finally we see four times when bitcoin broke out about $10,000 level. Previous three times with bitcoin went about 10k it dipped right back below that level will it dip again at least in the short term. I do not think. So technicals and fundamentals are on our side. It is probable to go much higher hopefully in the next few months. This $10,000 level will turn into support and not resistance.
Let’s take a quick look at what CNBC analyst and well-known Bitcoin bull brian kelly said about his bitcoin price prediction. He said
“When I look at precious metals vs Bitcoin, Bitcoin has better fundamentals, and when fundamentals I’m talking about the stock to flow ratio. It’s better than gold at this point because we had the happening and when I look at the bitcoin cycles they the bull markets tend to cluster around the happenings and so we’re trucking right along like the 2016 happening cycle and that would imply that sometime in Quarter 2 2021 you’re looking at a bitcoin price of $50,000. So that’s kind of the long-term target and in the shorter term, $10,500 was a really big number. We’re breaking out of a two-year range. It would not surprise me. This is just pure trading 101. Once you break out of a range goes to prior highs that’s $20,000. To me, I think you know that’s three to six months down the road. So bitcoin looks like a go two to five times higher whereas gold is gold gonna go to four thousand.”
Let’s take a look at the stock to flow model before bitcoin having a bit constructive flow was at around 26. Which means there was roughly less than four percent annual inflation rate. For the past four years around only four percent new bitcoins we have seen been pushed into circulation.
After 2020 having Bitcoin constructive flow increased twice while the inflation rate dropped in half. So instead of having a four percent annual inflation rate now, we have less than two percent. Gold stocks to flow are currently slightly better than bitcoins. It has about 62 stock to flow ratio. Which means the gold’s annual inflation rate is about 1.6 percent.
Of course, this is just a rough estimation but we do not know how much gold left underground. Not even because of how much gold can be mined from space asteroids. recently I read that NASA is eyeing up a nearby asteroid that contains enough gold to make everyone on earth a billionaire.
Unlike gold’s questionable inflation supply, we know exactly how many bitcoins we have in circulation today, how many bitcoins there will be in circulation next year, and even five years from now. So bitcoin is a more scarce asset than gold. In five years in 2025 bitcoin structure flow will be at 121. Which means the annual inflation rate will drop below one percent. This is a beautiful well-designed monetary system that no one has ever seen before until bitcoin came out 11 years ago.
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Brian predicts that bitcoin will go up to $20,000 in three to six months which is likely might happen by the end of 2020 and $50,000 sometimes in 2021. Look I think if the stock to flow, model, remains correct then we should definitely see those numbers in foreseeable future.
Another great interview I have seen recently on the Cointelegraph youtube channel with the founder & manager Ari paul who believes that we might see bitcoin increasing by 30x in the future. He said,
“Bitcoin has historically had these boom-bust cycles and um base it’s not a perfectly consistent pattern but generally the boom bus cycles are going longer in duration so instead of it being a two-year cycle, I think it’s becoming a three year and then will probably be a four year and then a five-year cycle and they’re becoming less extreme. So instead of it being a 50x up and then you know 95 down, it’s becoming a 10x up and an 80 down and then it’ll be a 4x up and then a 60 down. So I do think we’re going to get parabolic advances in the future. It’s just instead of it being a 2000% parabolic advance maybe it’ll be a 1000% right or a 500% parabolic advance.”
I agree with Paul that bitcoin’s booming bus cycles become less extreme but they last longer. In the past, we have seen bitcoin surging 2000% and dropping by 80 percent. In the future we will see bitcoin will increase by 1000% and dropping by 70% then the following cycle will increase by 500% and drop by 60%. So over a long period of time, this vicious volatility in bitcoin will subside.
Then we will see financial advisors will recommend bitcoin to grandpa grandma who wants to retire comfortably. If you go into hyperinflation as we did in the 1970s, I do not think we will see gold rally by 5 to 10x. It did not that much when we actually had hyperinflation. It might do like 224x but Bitcoin being this new inflationary hatch asset with such a small market cap we can see 10 to 30x increase.
Let me know what do you guys think about bitcoin price predictions. Leave your thoughts in the comment section below.