If you look at the screenshot above, you will see a nice push up from BTC, which - finally - crosses through a very much awaited resistance level, namely 20,000 USD.
For those of you that are into crypto for more than 4 years, this is not a surprise. We've all seen the bull run of 2016 - 2017. And we all know it was just about time (halving rewards, etc). And if history likes to repeat itself, we may expect now another 20x increase.
Only this time it will be different.
My humble opinion is that we will see indeed a significant increase, but it won't be as consistent as the last one, namely from $1,000 to $20,000. For the record, such an increase would mean we should see BTC at $400,000 at the end of this bull run (9 - 12 months).
Here's my reasoning:
- the futures and options markets. We didn't have this during the last bull run, when it was basically impossible to bet against BTC. Now it's possible and these mechanisms can act like price suppressors. Meaning people can make money now even if BTC goes down, and there are quite a few scenarios for that possibility
- institutional investors. We didn't have these as well, but this time around we have them. What does this mean? Institutional investors have a wider portfolio, which means they are more diversified. They're looking for more consistent growth across the entire portfolio, which means they may hedge harder, which can also result in a smaller increase for BTC, but a more consistent increase on their entire portfolio (which also contains stocks, bonds, etc). There is already a clear correlation between stock markets and crypto markets, they're not as divergent as they used to be the last bull run.
- DeFi. We had the foundation for DeFi, but it was very slow and the first attempts were more or les fiasco (remember the first DAO scandal and the ETH / ETH Classic split?). But now we have a working Decentralized Finance landscape, and that will create more opportunities for alts. I consider Ethereum an alt, by the way. That means a lot of alts will diverge from BTC and that will weaken somehow the BTC territory. Mind you, this is good news for the crypto world, in general, because we may see even 100x increases in alts, it's just not that good for Bitcoin. Overall, though, the value in crypto may increase even more than during the last bull run, only this time it will be flatter, distributed across a more diversified range of assets.
I wouldn't risk an exact prediction, but these are the main reasons - at least for me - which may indicate a smaller increase in value, specifically for Bitcoin, but more for other assets, during this bull run.
With that being said, I would love to be proven wrong by the markets, and see BTC at $400,000 in 9-12 months.
Thoughts?
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So there won't be a huge drop in January?
No idea, to be honest :)
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@dragosroua,
When I remember the day I sold BTC at 150 USD... No comments :D
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Oh man... that is a memory I would try and forget for sure.
That's an interesting and refreshingly different perspective (at least from what I've read so far). The big institutions getting involved is a game changer for me this time around but then, I still very new to all this. I'd only just started my crypto journey at the end of 2017.
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Valid reasons, and yes it is hard to believe in a x20 on prices that are already very high in numerical orders for our linear thinking brain. However, we should also take into account that we simply lack the experience with an asset like Bitcoin. The fact that DeFi, Institutions as well as the Halfing (and the loss of trust in Fiat) all removing BTC from the circulation and may put more pressure on demand. I beliefe BTC is a exponential asset by nature and it will surprise us again in the next months.
Many things have changed indeed. We don’t have ICOs but Defi..I agree with you that futures trading is an advantage now.
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