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Key Bitcoin Price Indicator Hints $21,000 ‘Fair Value’ By End Of 2019

|About: Athene Holding Ltd. (ATH), SF, Includes: BTC-USD
Summary

2018 marked a long winter for cryptocurrencies with prices declining by over 80% across the market.

The First Half of 2019 saw Bitcoin experience less excitement in the market.

From $10,000 to 40,000.

BTC’s bull run will not stop at $21,000bearing in mind next year’s halving event.

According to a Bitcoin (BTC) prediction tool the ‘Mayer Multiple,’ BTC price is not likely to hit $40,000 by the end of this year. The current trail points to an end-of-year BTC price of $21,000.

The Mayer Multiple is a calculation established by dividing the present BTC price by its 200-day moving average. Currently, at 2.09, the method has only experienced best readings of 14.79%, implying that a sharp shot to $40,000 by the end of the year is unjustified.

As Cointelegraph wrote in June 2019, BTC thrived in regaining the $10,000 mark in early June, only to hit the $11,000 mark a day after. The performance went against the sentiments of analysts, many of whom said $10,000 would be a watershed mark. Investors sitting on the fence were taught to jump on board once the $10,000 mark was attained, initiating a tremendous upward trend.

At press time of this article, the crypto markets were nevertheless taking a break from a bullish trend, BTC is valued at $10,120. For the remaining four months of 2019 and beyond, nonetheless, the Mayer Multiple suggests moves through $15,000, $21,000, and then $30,500 in 2021.

Bitcoin Performance in the First Half of 2019

On the calendar, 2019 comes after 2018 but in the crypto world, the year will absolutely be of far greater importance. 2018 was labelled as a long winter for cryptocurrencies with prices declining by over 80% across the market.

Many financial analysts had spent 2018 offering highly positive price forecasts backed by the late 2017 bull runs. The value of BTC plunged from $19,800 to $3,100, and altcoins were red throughout this period.

Perhaps in 2018, commentators wouldn’t be excited to provide price predictions, but alas they were. Not at first, though since the Q1 2019 experienced less excitement in the market.

When unveiling their pseudo-digital currency, JPMorgan used Q1 2019 terming Bitcoin at $2,400 fair price, and adding that the number one cryptocurrency was only significant in dystopia. From a price-performance angle, it was gloomy till April fool’s day.

April 1, 2019, ignited a full-blown rally which saw BTC reach $4,000, settling at $8,000 six weeks later. Ever since that period, we have been experiencing upward trends with a few 30% drops along the way, finishing Q1 2019 at 220% up.

In Q1 2019, analysts appeared glued on talks like fundamentals dodging price estimates. Since first April, however, price forecasts have clouded the crypto markets.

From $10,000 to $40,000

The famous BTC price analyst Tom Lee of Fundstrat Global Advisors has shifted from a conservative $10,000 to a slightly bullish $40,000 prediction within a period of three months. He has always labelled 2019 as a positive year for BTC.

Lee’s $10,000 forecast was proved right in June 2019, and since then, he firmly believes that the five figures milestone will prompt a FOMO-driven hype among institutional investors skyrocketing the price to $40,000 by the end of 2019.

Some analysts like Max Keiser also forecasted that BTC will reach $10,000 back when the increase above $6,400 was still 2019 best. Prior to any of these price calls, again, Weiss Ratings was on record saying bitcoin will hit a fresh All-Time-High (ATH) in 2019.

Just like Lee, Keiser also raised his short-term price forecast from $10,000 to $28,000 by the end of 2019. He nailed his prediction on the status quo in Europe, expressing bitcoin will test a new ATH this year.

For Keiser, the primary objective is not even a fresh ATH but a six-figure price evaluation, which drives BTC’s market cap to a trillion-dollar figure on equal levels with precious metals like gold.

Does This Forecast Hold Its Water?

As you are likely aware of, May 2020 will experience the third BTC block reward reduction, where the number of circulating bitcoins after every ten minutes will be reduced by half.

Though this does not sound remarkable, PlanB employs the stock-to-flow (SF) rate to support this target. For the sake of financial market newbies, a “stock” is the number of a particular asset, usually a commodity, in circulation; “flow” is the inflation ratio or the percentage of an added commodity to a stock per year.

Currently, BTC has an SF rate of 25, translating to an inflation ratio of 4% annually, while gold records as an SF ratio of more than 50. PlanB hypothesizes that there exists a strong correlation between the market cap of a rare commodity and its SF ratio.

After the third halving, BTC’s SF ratio will hit 50, implying that it will be in almost the same level as that of gold. According to the line of best fit for the method, by May next year, the “fair” stock to flow value for bitcoin will be approximately $55,000 per coin.

Although May 2020 is not the end of 2019, we expect institutional investors to “front-run” this significant event, resulting in the appreciation of BTC value to $55,000.

The Bottom Line

The May 2020 halving is an essential aspect of many of these BTC price forecasts with the anticipation of bitcoin sustaining its parabolic movement in the lead up to the block compensation halving. As always, we can’t lack naysayers, “the BTC is going to zero” gang whose predictions turn out to be ridiculous than Lee’s $25,000 end-of-year price valuation for 2017.