With the halving coming up, I want to weigh in my 2 cents on what I predict will happen. Although, first I want to share two quick stories that happened recently, and remind everyone reading how early we are to the this market. Then I will focus on the general sentiment of Bitcoin, CME Gap, and macro view of the supply cut from the halving.
Nothing should be considered investment or financial advice. Enjoy the ride.
Bitcoin Story Time
Before I dive into the price estimate, and what I think will happen in May, I want to tell a little story. Two stories to be exact.
Bitcoin Went to $20,000
This first story is from the other day at lunch where I over heard a conversation.
I work in a corporate setting for my day job in the nicest building in my city. At a restaurant across the street, I grab a lunch everyday and usually chat with the owners and workers.
A funny thing happened though. The waiting area is quite small, and two older gentlemen in very expensive suits walked up to get a table. There was a 5 minute wait, so they started to talk. Ironically, they started to discuss Bitcoin.
Do you have any of that Bitcoin? The man on the left asked the other man.
No, I do not like that stuff. It is all made up and you’re going to lose your money. said the other man
But it went to $20,000! I hear it is about to make another change as well. I really think you should look into it. I do not know what to do with it, but everyone is talking about it going up again. – man on left
Is your money in it now? – man on right
Yea, I have a little bit on Coinbase. – man on left
Good, take it out now. That’s the only way you’ll ever see it again. – man on right
Now, I could have interjected and had a discussion with these gentlemen about the topic, but I wanted their organic opinions. I love listening to what people think, especially when they think no one is listening.
While this was unintentional eavesdropping, it reminded me of the lack of understand still today in 2020 of Bitcoin. Many of the elite and wealthy people in the world, still have very little idea of what Bitcoin actually is.
Bitcoin is Worse Than Gold
There was one other funny conversation that happened at work with a co-worker.
The guy I was talking to is rather smart, but does not know much about crypto. Without going line by line, he basically made the case for gold being better than Bitcoin.
Unfortunately, he knows very little about crypto in general, and it made me not even want to have the conversation. I am unsure about most of you, but when people bring up crypto in conversation, I start to want the conversation to end.
The barrage of questions and claims of corrupt internet money, and fake coins really make it seem useless to discuss. Although, I try to direct them in the right direction by countering aggressive ideas with thought provoking ones.
The co-worker defended the point of, you can do things with gold, but what is a Bitcoin good for. It holds no value.
Without going into the countless stories of Iranian women owning their own virtual bank accounts for the first time in history because their culture and religion did not allow them to have bank accounts, the billions of dollars exchanged in Bitcoin daily for goods and services, the endless amount of infrastructure currently being built upon the Bitcoin chain by the largest companies in the world like Microsoft for ID verification, I simply said the transactions store data. I said this because he works with data.
What data? he asked.
All of it. I answered. Whatever you want it to store really. You could store the most important documents in the world on it in transactions, or you could send someone in Russia Bitcoin right now with no questions asked encrypting a message in the transaction if you knew how to.
He quickly dismissed the entire conversation, but again it opened my eyes to the lack of understanding about the grandfather of all cryptocurrency. I guess it will truly be like the internet. Everyone asked: why would I need an email address? Why would I need a website?
Today, all of these things seem like common sense, but back then it all seemed silly. I see Bitcoin as the same narrative.
Bitcoin 2020 Price Idea
If you read all of that, it was simply to convey an idea. The market is still incredibly young and immature. There is so much development, implementation, and acceptance still to come for not only Bitcoin, but all blockchain.
Back to the price of Bitcoin. The upcoming event of the halving for Bitcoin, it pretty much the superbowl of crypto. Every single investor and speculator is waiting patiently to see what will happen, and if Bitcoin will shoot to the moon again afterward like every other halving.
Personally, there are a few things I like to consider first.
CME Gap Price Of Bitcoin
For those that trade or watch any crypto Youtubers, the CME is a hot topic.
Historically, almost every futures gap has been filled due to the volatility of the market, manipulation, and trading beliefs. There is a simple saying where if everyone expects it to happen, everyone will plan on it happening and it will come true.
The same could be said about the Fibonacci trading levels for traditional stocks. They are made up levels of price movements based on universal ideals, but because so many people trade on them, they become real indicators of price movements through global acceptance.
Ironically, Bitcoin’s CME futures has become the same indicator. Since almost every gap has been filled, the $8,500 gap that has been left open since the recent price surge back to $10,000 is on the radar. It would be a safe bet to assume Bitcoin will dip back to the $8,300 to $8,700 levels leaving two options.
Either the price will break through the floor crossing the $8,200 level into the $7,000’s or it will not completely fill the gap due to competition from buy orders placed right below the gap around $8,400 and rebound back above $10,000.
Bitcoin Strategies in 2020
This will probably take place over the next 2 months, and leave a speculative summer market. Last year, we saw a huge bull run right before the summer months taking Bitcoin upwards of $14,000 which was unexpected and exciting. The price traveled all the way from the yearly low of $3,000 with most people claiming the death of the crypto market was at hand.
Although from research and polls, most people are continuously dollar cost averaging (DCA) into the market and not trying to swing trade these dips. From my perspective, most people still investing from 2017, are not shorting or trading, but patiently accumulating. The hodl is a waiting game, that most true crypto pioneers have perfected at this point.
Bitcoin Could Surge to $40,000
Personally, I think Bitcoin could surge upwards of $40,000 over the next 2 years. This would smash the previous all time highs of late 2017 doubling the previous $20,000 high.
There are a few arguments for this, but specifically the halving is going to play a huge part in this. The OTC market is already drying up with supply diminishing from heavy handed individuals putting organic upwards pressure on the market. Once the halving prices in, the mining industry is going to be in for a rude wake up call.
Currently, the network is consistently pushing all time highs and creating competition. As Satoshi stated, eventually Bitcoin mining will only be profitable by the largest mining facilities limiting the mining potential of individuals and smaller shops.
What this will do is start to give control of the supply from the mining operations to the largest groups creating a sort of funnel that will more than likely aim to maximize profits on both ends. With this being the case, the OTC market will suffer large set backs as contracts are renegotiated, supply is cut off periodically, and demand will be at all time highs as investors FOMO back into the market.
Why $40,000 Bitcoin
To be honest, Bitcoin could go much higher than this. $40,000 is a number that my Bitcoin projection models spit out back in 2018 that we should reach during the next bull run. Although, even at this price, Bitcoin’s market cap will still only be a lowly $800 billion.
This will not even make Bitcoin larger than some companies on the stock market. Comparatively, Bitcoin should start exhibiting trends and growth comparable to gold’s historical price movements. Given there is more wealth in the world than ever before, Bitcoin should actually far exceed gold once custodial solutions are common, ETF’s are launched, and the stock exchanges open their doors fully.
This is just my projected value for Bitcoin. Make sure to leave a comment on what you think Bitcoin will grow to below in the next bull cycle, and make sure to share if you agree with some of the points above. Cheers