May 2019: What will happen next with Bitcoin?
Since Bitcoin set sail in 2009, cryptocurrencies have made waves across the globe. The big question on everyone's lips: What will these coins be worth in the future?
The price of Bitcoin surged in May 2019 so we asked a panel of 10 fintech leaders why they think Bitcoin is on the rise; whether they think consumers should buy, hold, or sell; and what might be in store for the cryptocurrency.
Predictions are speculative and simply reflect the panelists' views and opinions. Their views and opinions may change over time. Predictions should not be interpreted as a recommendation to trade nor relied upon for the purposes of trading. Please remember to do your own research or seek advice.
Why the price of Bitcoin has gone up recently
8 out of 10 panellists think the price of Bitcoin has gone up due to crypto-related announcements made at the Consensus conference in New York, such as those by Bakkt and Microsoft. BitBull Capital chief operating officer Sarah Bergstrand said:
"The past three years, a few weeks before Blockchain week, we have seen the rising of prices and of the overall market cap, especially during the three-day Consensus conference. It also tends to fall as soon as the conference is over."
Digital Capital Management chief operating officer Ben Ritchie put it this way:
"The rise in the price of Bitcoin on the surface appears to be a result of the release of positive news flowing from Consensus this year, however there may be some additional underlying factors. These include the stability of Bitfinex and the USDT following their recent US$850m raise in 10 days, and Binance looking to buy-back their BTC position following the hack of 7,074 BTC. There is also an increased use of algorithmic trading pushing volumes significantly higher and fuelling confidence and with it opportunity."
The next most-cited factors were US-China trade tensions (50%) and the impending reduction in Bitcoin emission, also known as the halvening (50%).
Arca chief investment officer Jeff Dorman said there were a number of reasons for the price rally:
"Bitcoin has rallied for a variety of reasons, not one specific reason. It's mosaic theory. Pent-up demand spilled out because of Fidelity's new platform, China's trade wars, short liquidations and bitfinex forced buying from people who bought BTC with USDT in order to get out of USDT", he said.
Three panellists said the price surge is due to institutional investors embracing cryptocurrency, while two said it's because retail investors believe it's a good time to buy.
PhD student at the University of Saskatchewan, Ajay Shresthra, suggested the NASDAQ preparing for cryptocurrencies trading on its exchange is contributing to the price surge. Nafis Alam, associate professor at Henley Business School, said another factor may be an impending financial crisis, while Rouge Ventures managing director Desmond Marshall thought Russia going in full force supporting crypto was a key reason for the price surge.
Bitcoin price predictions
Bitcoin is predicted to hit US$7,543 by 1 June, according to the average of our panellists' predictions. (Where panellists predicted a price range, we used the middle figure to calculate the panel average. Where panellists gave only an upper limit, we used that figure to calculate the average.)
Both Bergstrand and WishKnish Corp CEO Alisa Gus thought Bitcoin will be as high as US$8,500 on 1 June, while Alam was the most conservative, predicting the price will be between US$5,500 and US$6,000.
When asked what the price would be at the end of the year on 31 December, the average price prediction was US$9,659. Again, Alam's prediction was the most conservative. He said it would not be worth more than US$4,000 on 31 December. Technologist Joseph Raczynski had the highest end-of-year prediction at US$17,000.
Dorman declined to give a price prediction, saying: "Making short term price predictions isn't practical. Making probability weighted investment decisions is better. And right now, it is a good risk/reward to continue to accumulate BTC. 1 BTC will always equal 1 BTC. Pricing BTC in terms of USD is dependent on a lot of things, including the inevitable weakness of the USD caused by unsustainable debt and inflation."
How high will Bitcoin go?
Only 40% of panellists think Bitcoin will exceed it's all-time high price of around US$20,000 in this bull run. Interestingly, panellists were divided on whether this bull run will be followed by a similar crash to the one we saw in December 2017, with 50% of panellists responding yes to this question and 50% responding no.
What does this mean for consumers?
When asked if they think consumers should buy, hold or sell Bitcoin, 50% of panellists said buy, 30% hold and 20% sell.
Fred Schebesta, founder of Crypto Finder and HiveEx, was one panellist who thought it could be a good time to buy: "If you believe in Bitcoin and its past, it's the low time", he said.
Ritchie said: "The fundamentals of Bitcoin improved significantly during the bear market despite negative sentiment suppressing the price. The utility and adoption of Bitcoin has increased during this period and now that sentiment has returned, so does its medium to long outlook."
Dorman suggested consumers should be consistent in their strategy. He said: "Timing the market isn't the goal. It's prudent to buy now, buy if it goes down, and buy if it goes up. A consistent strategy over time is the best way to gain exposure without trying to pick bottoms or tops."
Gus was one panellist who suggested consumers hold.
"I feel like BTC is back where it belongs, in the 6K to 10K range, and while eventually I do see it rising past 10K for a long term gain, it shouldn't be any time soon – if it does, it is unlikely to hold on to that level for long. Let the market rest a bit after the rally," she said.
Song and Raczynski also suggested consumers hold. Song said: "Bitcoin has real decentralised scarcity. Long term it's a good bet".
Raczynski's comment was: "I do believe BTC is going higher, but the run-up over the last three weeks has been huge. BTC historically runs in spurts, but there are rumours that whales are prepping to sell nearly a billion in BTC, ETH, and Ripple. Flush them out and in time BTC will rise."
Alam was one of the two panellists who said sell.
"It's a temporary surge. Nothing much has changed in the Bitcoin feature. It was a speculative instrument and will remain ever [thus]," he said.
The other panellist who suggested selling, Shrestha, simply said "good times may not last."