By While no one can say with 100% certainly what it would be worth, there are a few ways to assess what the potential price may be in one year’s time. I am assuming you bought around the $10,000 USD price point, as Bitcoin was trading around that average for most of the month. My personal opinion is that there are three potential valuations for Bitcoin over the next year. Here are my thoughts on three potential values for Bitcoin in February 2019.
This particular outcome is unlikely in a year but could happen. It would require a few different variables and market factors to see this type of crash. The reason I do not think it is possible for a Bitcoin to crash below this price is due to the cost of mining. Currently, the average cost of creating a Bitcoin is around $3800 USD in terms of the electricity cost. As no miner would sell at a loss and the difficulty rate will likely increase over the next year, the creation cost should end up at a minimum of $5000 by this time next year. While it is highly unlikely a miner would sell at cost, in the event of a complete crash, this would likely be the absolute floor price of a BTC.
For a crash to happen, a few very serious negative factors would have to come into play. The first would be an outright ban of Bitcoin by all major governments. That would undoubtedly cause the value to crash and many people who have invested to exit the market. The mini-crash in early 2018 was caused by such a ban being announced by the Korean and Chinese governments, whose citizens currently make up around 30-40% of the overall Bitcoin buying market.
The second factor that could cause this type of crash would be a major hack or security concern with the Bitcoin network or multiple major exchanges. In 2013, when Mt. Gov – the biggest exchange at the time – got hacked, the price of Bitcoin tanked as people lost faith in the security of the industry. One hack at this point would likely be unable to cause a crash, however, if multiple exchanges were to lose solvency simultaneously, it could happen.
A final and more likely possibility (but still unlikely in the next 12 months) would be for a newer better cryptocurrency to become better accepted, take Bitcoin’s considerable market share, and become the overall dominant cryptocurrency in the sector. This will likely not happen with any coin that is currently in circulation. However, it may happen if such a coin was to be invented and brought to market in the next few months. That, too, can be avoided as we would cover it here at CoinBeat first and make sure you as a reader knew about this new tech.
All in all, I put the chances of a complete crash to this level at 0-2% and it is highly unlikely unless one or more of these market conditions change to make this outcome a reality. Additionally if just one of these conditions were to become a reality, it would likely still not adversely affect BTC price to this point and would take more than one of these things to happen simultaneously to see price retrace to this level.
Bitcoin Grows Moderately To $15,000 – $25,000
Based on the current level of adoption and the overall market rebounding from the low of just under $6000 USD, it is very likely Bitcoin will see moderate growth and enter a relatively slow growth period. I put the chances of this happening somewhere around 60-70%. The reason I think this is the most likely scenario is for a few reasons.
First, in 2017, the value of Bitcoin grew over 2000% at its height and caused mass FOMO (fear of missing out). This led to many people jumping on the Bitcoin ship, looking for instant and quick profits. Unfortunately, the majority of those investors who entered in November and December, the months that saw the highest adoption rates of 2017, are now in losing positions with their investments. This means that investors who were watching the market for the last few months have likely become gun shy and will not jump in causing that type of instant growth in valuation.
That being said, there is a smaller segment that will likely buy as the price returns to around the $10-12k USD price range. I think this will likely cause growth, but at a much more controlled rate than what was seen during the later parts of 2017. Additionally, even if the masses wanted to enter the market, with credit card companies and banks looking to curve capital inflow by not permitting the purchase of Bitcoin via their gateways, it means capital entering the markets will become much harder to come by. This will likely stagnate the growth potential as the funding of investments will be harder this year than last.
Another reason that I think Bitcoin may not grow as quickly as it potentially could or did last year will be due to both scaling issues with the network and the multiple forks that were released at the end of 2017. The scaling issues, for one, are a major concern, and unless Bitcoin can implement the Lightning network, it risks being left behind by the sector and its own forks. The forks themselves are likely going to also hold back Bitcoin growth as they become more widely traded and their scaling and networks have solved a few key shortcomings of Bitcoin itself.
I can see Bitcoin rising to double, triple, or even quadruple its February low. However, growing beyond that will be difficult considering the above issues. That being said, Bitcoin is the biggest brand name and market shareholder. Also, as it acts as an entry point to the sector and the default reserve currency, it will likely grow, although much slower than it did in the past.
Bitcoin Moons To $50,000 -$150,000 USD
This potential outcome is more likely than a complete crash but less likely than slower more steady growth. Bitcoin going into the upper 5 or even 6 figures is not impossible but would require a few major market changes in order to happen.
First, governments would need to make clear their plans for regulations in order to allow institutional capital to flow into the markets. Until these rules and regulations are clearly defined, institutional investors will have a hard time selling the idea of investment to their boards. If, however, the governments were to clearly state their positions and where regulations and legal status of Bitcoin would fall, institutional money entering the sector will likely push Bitcoin to the moon.
A second potential market change that could cause this to happen would be the collapse of a major fiat currency. If, for example, a major country in the upper half of the world GDP rankings was to default on a loan or suffer from hyperinflation, like Venezuela and Zimbabwe last year, Bitcoin would likely surge as those citizens begin to use it as a hedge and holder of their capital. This could also cause a major change in the way larger economies see their debt and central banks creation of money and may cause a major move into Bitcoin which is not controlled by any central authority.
The third potential that will definitely have a major impact is the proposed Bitcoin ETF’s. If, in August, approval is given for ETF’s by the SEC, a lot of money will flow into the sector from institutional investors and a price surge will definitely happen. We at CoinBeat will be covering this potentiality profusely and will update our readers more in-depth in the near future.
These are just a few potential market changes that would cause this kind of major surge of Bitcoin. Though the price is likely to eventually hit a market cap of $500 billion to $1 trillion, it is likely not going to happen in the next 12 months, unless a major change like one of these were to happen. I put the chances of this type of surge and growth at around 20-30%.
Though the chances of super profits in the 10x or 20x range are unlikely in terms of price, the sector as a whole will likely grow much closer to those numbers. That means that Bitcoin will likely lose a lot of its dominance and other coins will surge, generating big returns for investors who chose the right ones.
Trading Bitcoin Could Make You A Lot of Money
Additionally, I think that volatility is going to be immense over the next calendar year as regulations, scaling and competitor coins all will create large swings in BTC price. That means, while holding BTC may not be as profitable as 2017, trading it definitely will. While most investors are unsure how to trade and are not comfortable trading actively, companies like CoinBeat are now available to service these investors and give them the information that keeps them in the green and making quality investments.
CoinBeat connects cryptocurrency investors and readers with professional traders, writers, analysts and professionals from all over the sector. Subscribing to CoinBeat and checking back often will ensure you stay ahead of the sectors informational curve and know which one of these potential outcomes is most likely.
These are the three ways I see Bitcoin value unfolding over the next 12 months. I do think that we will see the sectors growth increase, while Bitcoin growth slows in comparison. 2017 was the year of Bitcoin, and I believe 2018 will be more the year of Altcoins. For these reasons, I think it is important to diversify to other assets in the sector if you are looking to maximize profits and returns over the next year.
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