Bitcoin forecasters had an embarrassing 2018

Photo of Bitcoin forecasters had an embarrassing 2018
FILE PHOTO: Broken representations of the Bitcoin virtual currency, placed on a monitor that displays binary digits, are seen in this illustration picture, December 8, 2017. Picture taken December 8. REUTERS/Dado Ruvic/Illustration/File Photo - RC14F398A170

At the end of 2017, the price of bitcoin was on a tear. At one point in December, it rose to within a hair of $20,000, and though it moderated some after that, hopes remained high that its climb would continue through 2018.

It hasn’t. Today (Dec. 23), bitcoin’s value sits at about $4,025 as of this writing, a plunge of more than 70% since the start of 2018 for the cryptocurrency, and one many crypto-forecasters failed to see coming.

According to Bloomberg (paywall), Wall Street’s “most prominent” bitcoin forecaster, Tom Lee, cofounder of Fundstrat Global Advisors, began the year expecting the cryptocurrency to reach $20,000 by mid-year and $25,000 by year-end. He has since cut his “fair value” range to between $13,800 and $14,800.

Now he won’t even predict when his targets might come about. “Because of the inherent volatility in crypto, we will cease to provide any timeframes for the realization of fair value,” he wrote in a Dec. 13 research report.

Kay Van-Petersen, an analyst at Saxo Bank, forecast in January that bitcoin could hit $100,000 before the end of the year.

Even as the price fell, hope held on. In July, Arthur Hayes, the cofounder and CEO of BitMEX, told CNBC that bitcoin could rebound up to $50,000 by the end of 2018 under the right conditions.

Even before 2018 started, guesses at bitcoin’s value by the end of the year were looking at the tens of thousands of dollars. People thought institutional investors would begin putting money behind the cryptocurrency, a belief that only strengthened during the year as rumors swirled about the US Securities and Exchange Commission (SEC) stamping its approval on the cryptocurrency with an exchange-traded fund, which tracks a group of assets but trades like stocks. (Turns out it hasn’t yet.) The conditions seemed right for bitcoin’s climb to continue.

But then bitcoin has long been notoriously volatile, and with each passing year it becomes a little harder to argue that it can serve as a financial safe haven, like gold. This year looked particularly rough.

It’s just as hard to accurately forecast a price drop as a rise, of course. Benjamin Quinlan, CEO and managing partner at Quinlan & Associates, did predict the price of bitcoin would tank in 2018, but his prognostication was that it would fall to $1,800 by Dec. 31. It’s not quite that low, either—though there is still time left in the year, and nobody really seems to know what’s going to happen. Many forecasters are undoubtedly hoping their predictions for 2019 go a little better.

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