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The Core Flaw In $100,000 Bitcoin Price Prediction

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The price of Bitcoin has plunged by more than 15 percent from its 2019 high of $13,868.44. But that is not deterring investors from making bold bullish predictions for the cryptocurrency.


Anthony “Pomp” Pompliano, co-founder & partner of Morgan Creek Digital Assets is the latest to join the rank of bulls who believe Bitcoin price could hit the $100,000 level by 2021. The former Facebook executive borrowed his bullish bias from a so-called halving event next May that will slash the supply rate of Bitcoin by half. That would make the cryptocurrency scarcer than it already is. On the other hand, an increase in demand would prompt people to bid for Bitcoin at higher rates.

“Supply-Demand economics remain valid,” reasoned Pomp. “They are a great way to determine the market price. So, if the demand for a fixed-supply asset increases, we continue to see price appreciation.”

Halving and Bitcoin Price

Halving has historically done well to Bitcoin.

Every four years, the cryptocurrency’s underlying algorithm reduces the supply of Bitcoin by half. In the beginning, the cryptocurrency’s daily issuance rate was close to 7,200 BTC at a block reward of 50 BTC. Following the first halving in 2012, the regular issuance got reduced to approx 3,600 BTC with block reward going down to 25 BTC. And in the next, the numbers got slashed another half —  1,800 BTC daily issuance at a block reward of 12.5 BTC.

By May 2020, the block reward will get cut to 6.25 BTC per block while the daily issuance rate would be about 900 BTC.

Simultaneously, the price of Bitcoin noted four-digit percentage gains upon every halving event. Following the first supply rate cut, the cryptocurrency noted a 7,976 percent surge in its spot rate. And after the second, it rose by 2,902 percent, as further illustrated in the chart below.

bitcoin, bitcoin price

Bitcoin Halving Events and Their Impact on Price | Source: Use Journal

Doubts, Nevertheless

The all-time highs achieved during each halving also followed more substantial downside corrections. After December 2, 2013, the day Bitcoin established a new historic high of $1,163, the price pursued a strong downtrend, eventually falling by approx 86.90 percent from the local top. Similarly, following the next all-time high formation on December 16, 2017, which was near $19,666, Bitcoin corrected to the downside by approx 83 percent.

There were also other catalysts at play during the so-called halving uptrends. In 2013, the Bitcoin price boom came ahead of the hack of Mt. Gox, the largest cryptocurrency exchanges of that time. Willy Report later claimed that shady people in Mt. Gox were artificially inflating the Bitcoin price using bots.

“Basically, a random number between 10 and 20 bitcoin would be bought every 5-10 minutes, non-stop, for at least a month on end until the end of January,” read the investigation.

The next halving uptrend of 2017 had also experienced shady market behavior. In that, a massive influx of new blockchain startups conducted billions of dollars worth of crowdfunding rounds – all raising funds in Bitcoin. That increased the demand of the cryptocurrency, which sent the price to an unrealistic $20,000 level.

Eventually, more than 90 percent of those startups failed and probably sold their bitcoins to cover their losses. The result was a strong downtrend that brought the cryptocurrency down to as low as $3,122 in December 2018.

Final Thoughts

Bitcoin has outperformed every major and minor asset this year in terms of returns. The world’s first and foremost cryptocurrency in June towered above the $13,500 level, bringing its year-to-date return close to a whopping 275 percent. That happened after major financial firms like TD Ameritrade, Bakkt, and Fidelity Investments announced that they would offer Bitcoin trading services. That said, Bitcoin had every reason to rise based on speculation of real demand, if not real demand itself.

But saying it would hit the $100,000 level is nothing but a crystal ball prediction. No evidence shows a broader demand for Bitcoin-related products as of now. And as BitMEX founder Arthus Hayes during the recently-held Asia Blockchain Summit, this cryptocurrency could go anywhere from zero to a million.

The question remains: why $100,000?

Do you think Bitcoin price will hit $100,000? Let us know your thoughts in the comments below.


Images courtesy of Shutterstock, Use Journal, Twitter :



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Crypto News

Erik Finman: My Cryptocurrency Will Kill Libra

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By CCN Markets: Crypto millionaire Erik Finman says bitcoin “is being replaced” by Facebook’s Libra. But he insists his cryptocurrency, Metal Pay, is the “Libra Killer.”

The 20-year-old entrepreneur made the ballsy claims in a blog post at Wall Street Playboys. Moreover, Finman boldly declared that his Metal Pay platform could supplant both bitcoin and Libra.

Finman: Bitcoin is a dinosaur like MySpace

Finman says the reason why BTC will go extinct like MySpace did is because its adoption has stalled irretrievably.

In addition, he warns that Facebook’s Libra is aggressively coming to crush bitcoin. That’s exactly what the social media monopoly did to its early competitors.

“Much like Myspace was replaced by Facebook, it looks like Facebook’s Libra ‘cryptocurrency’ is trying to do the same to Bitcoin. If you’re someone who believes in cryptocurrency and what it represents, Libra is your worst nightmare.”

Finman: Bitcoin is not practical

Finman wrote that while BTC has raised mainstream awareness of crypto, it has now hit a ceiling. And there are three main reasons for this:

  • Regulatory murkiness.
  • High fees and long transaction times.
  • Crypto community infighting.

“Bitcoin’s adoption has stalled, and the barrier to its continued growth appears too tough to crack. This isn’t necessarily about its value as an investment – being treated like ‘digital gold’ is fine for a cryptocurrency that is seen as a way of getting rich – but more about Bitcoin’s use as an actual currency.”

Lack of regulatory clarity is a problem

Finman says continued regulatory murkiness about whether BTC is a commodity or a currency has damaged its viability as a mainstream investment.

Because of this lack of clarity, Finman says bitcoin is languishing in “this weird middle ground,” where it can be used to make purchases, but is often viewed as a store of value.

This ambiguity has also raised the hackles of the IRS, which recently sent 10,000 threatening letters warning crypto investors to pay their taxes.

This unfortunate image that bitcoiners have as tax evaders will inhibit further adoption, Finman says.

“As long as regulations are a mess, Bitcoin’s growth won’t move much,” Finman said. “If you want institutional investors to get on board, you need to make this less murky.”

Crabs in a bucket

Finman pointed out that high transaction costs and long processing times are further deterrents to mass adoption.

Finally, Finman says petty infighting is inhibiting bitcoin’s growth. He notes that “competing factions, unstable forks, and misinformation” are holding it back from reaching its full potential.

“What’s the difference between Bitcoin, Bitcoin Gold, Bitcoin Cash, Bitcoin SV, and countless other forks? Which is the ‘real’ Bitcoin? These are questions that people have and the answers vary depending on who you ask.

This chaos is hurting Bitcoin’s ability to solve problems and become better. Every time fixes are proposed to enhance Bitcoin’s performance, there’s a risk that it will just create another fork and further fragment the community.”

Finman: Metal Pay is the future of crypto

While rattling off all the problems he claims will render bitcoin extinct, Erik Finman touted Metal Pay, his crypto startup that he insists will take down Libra.

Finman called Metal Pay the “first ever all-in-one digital banking platform for cryptocurrency.” He boasted that Metal Pay already has a working app, a “thriving marketplace, and a loyal user base.”

Finman says Metal Pay is exactly what Libra wants to be, but will never become because it’s being assailed on all sides from regulators.

Erik Finman unveils bitcoin Libra Killer Metal Pay
Erik Finman says his crypto payment app Metal Pay can “kill” Libra and supplant bitcoin. | Source: MetalPay.com

On the Metal Pay website, Finman says he’s so confident in the future of his project that he’s prepared to invest all his bitcoin holdings in it. And he suggests you hop on-board his revolution.

Why? Because Finman says that while bitcoin is great, it’s “flawed in the way that the Ford Model T was flawed — good for its time, but not the future of its industry.”

This article is protected by copyright laws and is owned by CCN Markets.

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