Why Bitcoin Could Reach $23,000 Soon
Bitcoin has been facing off against altcoins as people shift their funds from "useless" Bitcoin into altcoins they perceive as useful (which are often useless as well). In my last video, I mentioned 3 potential catalysts that could cause this money to shift back into Bitcoin:
Hard fork with a lot of hype
Lightning Network which changes narrative from "Bitcoin is slow and useless, hence will die" to "Altcoins only advantage, speed and affordability, just was erased and Bitcoin already has the brand and business support." Even if it DOESN'T end up being true, the average crypto investor will likely feel this way.
Signs that more institutional investors will jump on board, such as news on additional derivatives and ETFs
Once eyes shift back onto Bitcoin, I suspect its market dominance will increase from its current level all the way up to 50% again. At the current cryptocurrency market cap, that would put Bitcoin at $23,000.
This is a fairly rudimentary and optimistic analysis. The last time we saw Bitcoin dominance fall this low was because of the threat of the Flippening (Ethereum taking over Bitcoin in market cap). When this occurred, Bitcoin recovered its dominance through a cryptocurrency selloff rather than a boom back in July (see video). While Bitcoin sold off from $2,650 to $1,900, its dominance soared from 37% to 50%.
Why did this happen? Because of "flight to safety" - as insane as it is due to its volatility, Bitcoin is actually the "safe" asset in this crazy market. It's also a quality asset as it has had a long track record along with huge community and developer support. What followed everyone is aware of: The crypto market went boom and Bitcoin retained its 45 - 55% market dominance for a while.
However, from October to December, Bitcoin had a crazy bull run which shifted dominance up to above 60%. Just last month, Bitcoin's dominance reached 65%. Yet everyone is certain that dominance will continue to tank due to being at an all-time low. I disagree with this assessment and believe a recovery to 50% (which Bitcoin has tended to hover around over past few months since the altcoin boom last year) is in the cards soon.
Even in the event that the market goes down, Bitcoin remains a safer option than other cryptocurrencies. For the record, this means I am NOT selling Bitcoin at $17k anymore. In the event of a continued cryptocurrency bull run, Bitcoin is well positioned against other cryptocurrencies and could easily see $20k+ soon. What are your thoughts?
Do a video which covers how much 'new' capital is flowing into cryptos. E.g. has the recent Altcoin gains been from capital moving out of bitcoin and vice verca. This could be a good indicator as to the future of cryptos price wise.
The majority of ripples pump after the december flash correction came straight from bitcoin. I watched it happening. $60 billion in market cap over the course of two days!
So assuming that a really good alt-coin could reach 10% market while bitcoin should have between 30% to 50% at most times, then if we take for example digibyte(DGB) that has 21.000.000 max coins, its 1000 times the amount of bitcoin
so even if DGB is a huge success and holds 10% of market, and bitcoin holds 50% .. dgb value should be 1/5000 of the value of bitcoin
putting a moreorless low value for btc like 15000 that would allow dgb to go up until 3 USD
but outside of this example, do you think this is a valid way to calculate the possible maximum value of a coin?
Market cap is simply Price of a coin X circulating supply. Its exactly the same thing with stocks which are Price of a share X Oustanding shares.
It's not a subjective metric, that's literally exactly how it works.
First and foremost, I am a huge fan of your channel, your style (even the monotone voice people love to hate) and your generally contrarian point of view.
But I can't help but agree with many of the YouTube comments I saw pointing out how frequently you change your position. One day you are buying BTC high and selling low (that was the one video where I truly disagreed with your strategy); another day you say BTC shouldn't be bought above $10k; then you say you expect it to climb but will be selling at $17k because you think it will drop after that; and now you are predicting $23k BTC. You are kind of all over the place with your predictions.
THAT IS OK, because of course as market conditions change and information changes, our price predictions should change as well... but I guess I am wondering what specifically has made you change your tune most recently from selling at $17k to now being very bullish? Was it solely the recent run up in Alt Coins? If so, that's fair, but that takes me back a few videos to when you were planning to sell at $17k. Did you not see the Alt Coin run coming at that point?
I hope I am expression my question clearly enough here, as I feel like I am a bit all over the place in this comment. But long story short: Would you care to explain/justify/whatever why you have been flip-flopping on your price predictions so much recently?
Thanks, and keep up the excellent work!
Hi CI,
Another insightful video! It got me thinking about BTC and the markets in general. Not sure where or when the term "altcoins" got coined (lol) but it seems like a natural and reasonable description of the landscape. I wonder if it was just a analytical construct that we use out of convenience or is it a tacit subconscious admission that BTC is, indeed, the bedrock of this whole experience.
Its like a childhood game of tag and BTC is the "safe" base we can all run to when Mr Market comes to nab us. We know this in our minds but act in a manner which suggests we trust it on a deeper level than mere intellectual cognition.
Other BTC attack surfaces I have been thinking about:
Altcoins - friendly competitors in the arena. Solution: buy high quality altcoins with staying power (ie diversify)
BCash - I consider BCH a special case scenario in that its explicit aim is to destroy and replace BTC. Solution: consider the entire value of bitcoin to be BTC and ALL its forks. Own them all; don't sell off forks if you can help it. Respect the entire family and sleep better at night knowing you capture all of the action no matter which project moves forward with whatever crazy price action occurs. Suddenly, Roger Ver and Jihan Wu become your b!@#$es and work for you.
Insecure exchanges - solution: get a hardware wallet or make paper wallets and take responsibility for your newfound wealth. To paraphrase Trace Mayer, "If you have newly acquired $1 million dollars of wealth, then you should put in $1 million dollars worth of thought into securing it."
Centralization of mining - I am not well versed in this area other than knowing BTC's mining network is the most decentralized one in existence. Not sure if its trending toward more or less centralization. The CryptoAsset book you recommended mentioned the Herfindahl-Hirschman Index which can estimate the degree of monopolization of a market. At the time of their writing, BTC mining network was considered fairly decentralized. Here's a more updated and very technical evaluation which tries to quantify the issue so it can be improved:
https://news.earn.com/quantifying-decentralization-e39db233c28e
Question for you: Is it useful to think of this market in terms of sectors and construct a portfolio based on the best players in each sector? I am speaking as someone that wants to hold anything I buy for at least 1yr to avoid short term capital gains.
Thanks again, CI. See you Monday!
Honestly I didn't use to think that it was a smart idea to separate the field into sectors because correlations used to be a lot higher, but now I think it's not the worst idea:
So on, so forth. It does seem that they pump in groups now far more often than they did before so may not be worst idea in world to diversify into groups as opposed to past where I'd say just pick whatever altcoins you like best even if that makes you concentrated in only 1 or 2 "sectors."
Can you create a video about scalability? Bitcoin and Ethereum has scalability issues and many altcoins in the market are fixing this scalability issue. You said in a past video that it's not an important factor. I seen someone transfer $50 Bitcoin and got a $20 fee. Gaming company Steam has removed Bitcoin as a payment option because of the transaction fees. This scalability issue is real.
Well is clear that scalability issues are a big obstacle for cryptos as currency
But for cryptos as investment it is not a big problem,
Collecting from the last 10 videos from him i assume his position is as cryptos are not a currency TODAY and are being used as investment, it doesent matter and IF they become currencies the tech of the most relevant coins will evolve to do the necesary things ( in other words the market will regulate itself)
I agree with you that bitcoin still has a lot of life in it, and that utility isn't that important in determining price. All the newbie money is coming in and they just care about seeing it go up and patting themselves on the back.
Personally, I don't normally trade on swings or news. I generally hold onto things that are either useful now, or will be useful in the near future. Most cryptos definitely don't fall into these categories. Steemit obviously does.
I've already heard people saying to me that LN will make other fast networks obsolete, and I agree that we'll probably hear that more as LN gets closer. Kudos
It's an interesting theory, but I disagree. The reason for my disagreement is based largely on BCH. We all know that Coinbase is one of the largest, people-friendly places to buy Crypto. For a long time, when people got a Coinbase account, They would see three cryptocurrencies; Bitcoin, Ethereum, and Litecoin. As you say, 'Reality was lost a long time ago, Perception is all that matters.
However, now people will get a Coinbase account and also see Bitcoin Cash. Immediately, they will think "well, what's the difference?" They'll start to look into it, and realize that Crypto is so much bigger than Coinbase. From there they will see other options, and huge gains compared to Bitcoin (probably via CoinMarketCap) and want to try their hand elsewhere.
I honestly believe that average investors are being forced to be a little more intelligent about their 'investments' than before, and therefore they will shift away from Bitcoin much faster than before. I can see Bitcoin hitting 40-45% Dominance, but it's going to fall, and continue to fall.
That being said, I will still keep at least 25% of my portfolio in Bitcoin, because as you said, it's seen as the 'safest' crypto to invest in.
Thanks for the great content, cheers
Thank you for the comment abiotic. I have no doubt there will be confusion, but what do you think the default is going to be when they see:
I don't think many people will mistakingly go for Bitcoin Cash. I think most people who get Bitcoin Cash will be because they genuinely believe it is better or because they think it has higher potential for returns (which partially goes along with what you said, but not fully as Bitcoin obviously has proven much higher returns in long-run since it actually has a long-run).
Of course they will see Bitcoin first. Bitcoin is first. But I think that the confusion that will come from seeing Bitcoin Cash second will result in people wanting to research.
If people see Apple and Apple cash (Apple Cash as an example) they would think "WTF, What's the difference?" Once they investigate the difference, they'll decide it's worth the extra ten minutes (In their inexperienced minds) to research the next largest crypto. Whether that's Bitcoin Cash (because it's second on Coinbase), Ethereum (because it's the next listed crypto that isn't "Bitcoin") or Ripple (because of CoinMarketCap), They will begin their exposure to alternatives to Bitcoin.
I have a feeling that Reddit will begin to play a larger part in this ecosystem as time goes on, mostly because it is a very active community. Especially because, as everyone knows, this is a very overbought, overhyped market.
I have a feeling that the confusion that will be brought on by Bitcoin Cash will have a very bullish (in the long term) effect for Altcoins.
My question for you is; if people look as CoinMarketCap and see 250% gains on Tron, with 5% on Bitcoin, what are people going to impulsively start doing? Personally, I think that we are still in the early stages, and because of that, Altcoins are going to continue to gain relative to bitcoin.
However, Bitcoin is not going to go away. I would not be surprised to see Bitcoin hit $500,000,000 market cap. But it is my estimation that bitcoin does not hit 50% again until there is massive mainstream (read ill-informed) adoption of Crypto.
You don't account for the fact that a lot of these news outlets are saying BTC is in a bubble, not the crypto market is in a bubble. So when new entrants discover all these other currencies that they aren't being told are in a bubble, they see more of an opportunity.
This is illustration of what a bubble looks like, I believe bitcoin just formed the bull trap and is at the return to normal stage, but the rally up will be slow and this will cause fear amongst the new investors.
Edit: Also, if people by cryptos only to speculate, they do not have future. Cryptos are not backed by assets and are not worth even the electricity used to mine them.
Awww this picture brings back memories... funny how many times it's been posted in relation to BTC. In 2012. Couple times in 2013. In 2015. Summer 2017. Now.
See ya next year!
I know... when you post this graphic, you're supposed to say "Tulips! Tulips!"
You don't have to be a genius to say that cryptos are overvalued. But somehow people seem to think that saying so makes them a genius. Yes, son, cryptos are overvalued. Shush now, the adults are talking.
https://imgur.com/nEnQrWl
:)
Well this is why you never know when we will hit the top. The fact is you must not be lead by the image of the graph, but by the stages presented in it.
As long as bitcoin continues to command near-zero utility value, it will always be associated with irrational exuberance and bigger and bigger idiots rushing into a market they don't understand. @yourboy said it perfectly in another comment: "Idiots are a finite resource." The only question is whether we're running out now, or later.
Idiots are not a finite resource.
That's where he is wrong, the supply of idiots will never cease.
Humanity itself with its entire "economy" is a primate bubble, and it's going to go plop while this century trundles towards its end.
It seems you haven't seen the updated bubble model for bitcoin
https://imgur.com/nEnQrWl
It can't be endless, the other name of bubbles is "the bigger idiot" market. In other words, people enter the market knowing that the asset is overpriced, but lead by greed and fomo think that someone will buy it at higher price. And idiots are finite resource.
Of course you're right...but for now, this market has defied all logic...and I suspect it will continue to, at least for the time being. Also, on the contrary, I am making considerable returns mining a variety of coins.
I hope that ypu continue to make money and exit the market at the right time.
It's possible that we see the bubble pop here, but I am doubtful at this stage. So much new capital just flowed into the market and this hypothesis of mine is ONLY based on a shift of that money to Bitcoin rather than more new money. I don't think we'll see everyone heading for hills quite yet, although again - it is notoriously difficult to predict tops in bubbles so you just never know.
If you are right for the altcoin exodus, then yeah we will see massive bull run for bitcoin, for the reasons presented by you. The question is whether or not btc will surpass it's previous high. This is what I doubt, the herd has seen one top, if it is already in the market, making profits, they will cash out of Bitcoin as soon as it reaches the previous top. At this time in the market of BTC/USD we do not have rational people believing in bitcoin's future , but speculants who are in the amrket only for the quick buck.
Comparing that graph to the Bitcoin price, they sure look very similar. So it's easy to conclude that Bitcoin has now peaked. However, one could argue that, instead of being in the 'Bull trap' area, we've actually just entered the 'Institutional Investor' phase, and that we're in the 'Take off' area. The general public is definitely not in yet, and institutional investors, afaik, have only just begun to explore Bitcoin. For me personally, I think we will see Bitcoin at $100,000 within a couple of years. But it will surely be a very volatile ride.
Compare it with this picture. As long as money is going to be printed at such rates because of quantitative easing, all asset classes (including cryptos) will have higher and higher USD evaluations – it's not the value of crypto that is increasing, it is the value of printed FIAT that is decreasing rapidly.
Hey Cryptovester,
Perhaps I've missed this video or comment somewhere as I'm sort of new to the crypto space. But do you mind briefly explaining or consider doing a video on what the implications would be if a large, already established, well-known company, created their own blockchain or token?
It seems to me with how much hype there is around ICOs and the extremely high evaluations for companies that don't currently have anything more than a concept to offer, that a large well-funded company wouldn't just create their own cryptocurrency. This would help the large corporation both easily raise funds and would also likely pulverize any other competing cryptocurrencies that were trying to take market share from them... or hoped that some said corporation would adopt their cryptocurrency in the future.
The main argument against this notion that I can think of is that a lot of people, especially in this space, want more things decentralized. And if Facebook created their own blockchain or token a lot of people might not back it, sort of like the hate against Ripple. However, on the contrary... while people want more decentralization, they also want more money. Unfortunately, IMO most people will choose the latter.
Appreciate your feedback and channel—Cheers.
It's a good question and one I've pondered before. On paper it sounds great, but I'm actually not sure what would happen in practice. I'm not sure what the legal implications are of creating a token that borders on being a security. The lack of clarity on such issues may be the very reason we don't see it occurring. Note too that they need to add some level of decentralization to it (READ: Not full control) which is scary to most executives. If they don't decentralize it, what's the difference between that and a Microsoft Point? Obviously quite a few on a technical basis, but you get my point.
Its the kind of thing I can see a company like Facebook doing. Zuckerberg recently voiced his interest in blockchain technology and decentralizing Facebook. I feel as though Facebook is destined to fail in the long run if it does not adopt a decentralized advertising scheme where users are paid for their data and have control over what they share. Or perhaps they will intergrate and existing decentralised advertising platform like Papyrus into their site - who can say!
I have been following you now for several months and wanted to thank you for the insightful information you have on the market. I myself am a cryptominer so it this really helps me to think about how any why the market behavior moves like it does. I do have a question that I am curious to get your opinion on.
There has been more and more talks of Nvidia already producing their new series cards (lets call it 11 series) and halting production on their 10 series. Speculators say the performance boost from these new cards could see a 30-40% hash rate increase which could spike the market as well as the difficulty or certain popular coins i.e ETH. Large companies have already made multi million dollar purchase orders for these cards before they hit shelves to consumers.
My question is do you think there is any validity to ETH and other coins spiking in the next few months or just a bunch of hot air?
I don't know your knowledge/history with mining but thought I would bounce the question off you anyways.
BTC will hit 23k$ for sure in less than 3 months. Could also be next week. What bothers me is the potential downtrends it can take before a major bull run. If BTC 'crashes' to let's say 10k$ (like it did just 2 weeks ago), I think the next bull run will be really huge. Every investor will want to buy cheap and I'll be one of them, 23k$ will be a very pessimist target in that case.
Another is alts, I have like 30-35% of my portfolio in little altcoins, I will hodl because I think that wathever happens (even if alts drops of more than 75%), they will recover before the end of the year (in both USD and BTC pairs).
The point is should we be prepared to buy alt if BTC 'crashes' a bit ? What if alts goes up in BTC pairs ? Sell and take huge profit in BTC before the massive massive bull run ? Maybe just sell them in USD pairs ? Do not know what is best here ...
If the bullrun has already began, problem is simple, just waiting for alt growing and selling USD pairs or wait for BTC pairs to recover slowly.
Let's see what happens to BTC next week ...
All questions that are relevant in portfolio management. It's tough no matter what you are investing in. You just have to go with what you feel the most confidence in for a variety of reasons (risk tolerance, market sentiment, news catalysts, etc.). That's how I've always done it.