In the previous article about Bitcoin price trends at Coinidol.com, the experts predicted that the price of Bitcoin could hit $3,000 by the end of December 2017.
However, on June 6, the Bitcoin price hit an all-time high of $2,987. Almost $3 k per BTC. But then, the price fell down and now moves around $2,830-2,850.
We contacted cryptocurrency experts for comment on the possible future of the Bitcoin price and whether inevitable corrections will drive the price down.
Kangmo Kim, a Founder at
ScaleChain.io, a company developing protocols for Blockchain implementations, that are written from scratch, but compatible with Bitcoin, and developer of altcoin
dist.ai, that realizes distributed neural networks on blockchain, and co-founder and investor at the digital currency exchange
Korbit in Korea, commented to Coinidol:
“I am not able to predict the future price of Bitcoin. But it can drop quickly like it did back in 2014. So I would not suggest to invest more money in Bitcoin. I also suggest to sell half of Bitcoins that people own, as I expect the price to drop. What I can say is the BTC dominance in the total market capital of cryptocurrencies will drop over time as most of crypto-currencies are unable to solve scalability issues limiting the number of transactions to process per hour per altcoin. This will result in the increased demands for altcoins as their fees are cheaper than expensive cryptocurrencies like Bitcoin or Ethereum. So I would suggest to sell 25% of Bitcoin/Ethereum/Ripple you own to buy altcoins that are cheaper now. And to sell another 25% and keep fiat currencies such as USD or EUR. With the rest of 50% you can enjoy the rise of Bitcoin. (By the half kelly from Kelly's formula)”
Avi Mizrahi, former expert at FXCM Trading Station, MT4, Mirror Trader, Ninja Trader and currently Blockchain Editor at FinanceMagnates.com, also commented:
“It was only at the start of March 2017 that the price of Bitcoin surpassed that of an ounce of gold for the first time ever, and it has now reached considerably more than double the value of the precious metal which has been used as currency since the beginning of history.
Trying to rationalize this irrational exuberance, bitcoin holders list a number of reasons. One is that Japan is to stop applying consumption taxes on cryptocurrencies in July. Another is that mainstream adoption seems closer than ever with established companies jumping on the bandwagon. The Chinese are also said to be protecting themselves from an expected economic downturn that might devalue their RMB holdings. And lastly, the agreement announced in May to end the Bitcoin civil war by companies representing over 80% of the hashing power.
I am not a betting man, but I can’t see how this can go on while the network itself is no longer usable as a payment method. The issues of a huge backlog of orders and crawling confirmation speeds have only become worse and worse recently. I am afraid this is Tulipmania all over again.”
Miguel Schweizer, a Bitcoin Trader for Quantia Capital, an asset management and financial services company from Argentina, believes that corrections of the Bitcoin price will soon take the lead. He stated:
"We are long-term bullish on Bitcoin, but we see the price has gone too far, too fast. Markets that experience this exponential growth in such short periods get severe corrections when euphoria is over. We've seen this in Bitcoin many times, when the market reverses, it usually falls between 30 and 40%, as we saw last week too.
As regards targets for the rest of the year, I think bitcoin could easily reach 3500 before the end of 2017, as bitcoin is gaining popularity and getting the attention in the media.
However, we think bitcoin needs a correction before hitting that target. As I mentioned before, the price has gone too far, too fast, and that's not a healthy growth for any market.
We can see that in the volume of the market, there's a huge divergence between price and volume. In a solid rally, price should be followed by high volume, and we are getting higher prices with lower volume, with suggests the market is about to get a correction before we continue to the upside."
Richard Schultz, a cryptocurency trader at the Poloniex exchange:
“I believe this run up to $3,000 is a carbon copy of the last all time high above $1,000 which then subsequenty crashed. I think the same result will occur here after the price goes fully parabolic, I think there will most likely be a dip buying opportunity if the price crashes below $1,000 as the $1,000 area will most likely be the level of support at which the price collates to after the crash. As far as reasons that's always very difficult to tell, I wrote a thesis about bitcoin price that's available here.”
However, Richard Schultz added that people around the world are seeing bitcoin as an alternative to the fiat cash system in order to protect the value of their money. He continued:
“I believe there is a tremendous amount of distrust of traditional financial and governmental institutions. You can point to recent elections worldwide to see that many people are looking for alternatives to the status quo. I think bitcoin and more broadly cryptocurrency are an exact alternative to these institutions as something completely new is being built that will go beyond just currency. It's always important to mention the price, people are always looking to make money and there have been no better markets to so so then the crypto markets. I think the combination of those two main aspects are really what's driving bitcoin up to the price we currently see.”
J. Bradley Hall, a Founder, Chairman and CEO at ICON CAPITAL RESERVE SA, said:
“Expert predictions are always an interesting topic and a bit like predicting the weather. Candidly a question on value instead of price would elicit an entirely different response. There is a small but growing community that believe that Bitcoin represents new protocols for allocating scarce resources. In context, the HTTP protocol at the backbone of the internet is what can be described as a thin protocol where the cost of utilizing it was largely embedded and companies like Google created their fortunes building applications on top of it without having to contribute any vig to the house.
The Proof of Work (POW) required to create Bitcoin, suggests that investing the time and energy in so called mining to update the hash creates and rewards scarcity. It is however artificial scarcity, as it is not governed by physics but rather just by the design of the protocol. In this case the 'fat 'protocol suggests that instead of being 'free' like HTTP, the value of the blockchain or network lies not in the apps that are created on top of the blockchain but is instead embedded in the Bitcoins themselves.
While there is certainly scarcity and that may offer mixed signals in the price discovery process. Those on the other side of the bet (and at these levels it is a big wager) would argue that a significant portion of the BTC tokens have been lost or destroyed and 90% of the trading is manipulated on exchanges in China and now Japan which is difficult to dispute, as is the obvious hoarding that is going on.
BTC fanboys argue that the 'Network Effect' and 'Social Scalability' are driving prices but neither are unique to BTC tokens or even the blockchain for that matter, as Ethereum and several other chain protocols are emerging as potentially compelling alternatives.”
He further noted that Bitcoin is, and will be, a volatile currency and that we should expect both rises and falls:
“So is bitcoin going higher? Yes. Is bitcoin going lower? Yes. The directional moves will be violent. Although disruptive technologies tend to be revolutionary, they have evolutionary phases and it would be tough to debate the fact that we are in one now. On December 31, Bitcoin could be USD$5,000 or USD$5.00 or anywhere in between. Caveat Emptor.”