My predictions for crypto in 2020

in LeoFinance •  last year 

Steemleo's 3rd writing contest is out and this one is really interesting, as it'll help find out crypto wish lists, sorry, predictions from our very own steemit community. There are already a few visionary folks on steemit, who publish daily/weekly posts on crypto markets. Since most authors are early adopters, they clearly focus on a grand future. However, let me also make an effort to make some predictions for next year but I also want to focus on risks.

Bitcoin halving and new ATH

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The biggest event of next year is BTC's mining rewards getting halved in May. Historically BTC halvings have been followed by parabolic bull runs.

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Will history repeat itself? My guess is it will, however, this time, the bull run may not be as crazy as it was during Dec 2017. I feel so because BTC got a lot of mainstream media attention during 2017. BTC futures, followed by custody solutions from Fidelity, Libra, comments from US Treasury Secretary, US President Donald Trump and Chinese President Xi Jinping have made people more aware of bitcoin and my guess is that more people are also aware of how bitcoin can go up parabolically and also dump real hard after that.

No one can guess the true demand supply dynamics leading up to halving or post that. I do however, think that reduction in new supply and extreme level of HODLing can lead to costs of borrowing bitcoin to rise and that can also push prices higher, as shorting becomes costly and shorts are closed. Moreover, while people know BTC can rise quickly and fall equally quickly, euphoria is difficult to avoid. I feel that BTC will set a new ATM and my guess is that it will be around $35k to $40k. Even from current levels, that's nearly 4x return, and from lows, 10x. I had used Fibonacci projections a few months ago to arrive at those levels. I'm also not a short term trader so I don't trade for technicals. I invest for fundamental reasons and I do think that over the course of a couple of years, $100k BTC is quite a real possibility.

The biggest argument to a strong rise in BTC on halving is that if it's so obvious, then it must already be priced in. However, given how technical BTC market is, it could very well not be priced in.

Steem and SMT

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The SMT testnet is live and Mainnet is expected to launch in March 2020, or early 2020. I really do not know how great SMT will be. But let's look at what is happening with Steemit and tribes. Steemit has been in existence for some time now. I don't think it still has great content, or well crappy content outnumbers good content. There have been a number of changes and yes, bid bots are gone, and may be quality content has gone up. Even tribes, it's the same, apart from leo, most other tribes have been about dumping free tokens. It's still early stage but I don't see a lot of promise.

Actually, may be, first we need to know what will be game changing for steem? Will it be 100 million users? Will it be a $1bn market cap? Let's say it $0.5 billion market cap. I think whether SMTs come out or not, tokens or crypto by themselves are not enough to bring publishers to a platform. Publishers are where users are. And if users are happy with YouTube, Reddit, medium and other such platforms, I don't see why users will come to another platform such as Steemit. What matters for a user or consumer is content and old school platforms have too much of it. It is convenient for a user to be on sites run by industry giants. At some point in the future, may be decentralised platforms will be successful. I doubt 2020 will be that year. Yes, I think steem may see higher prices because of a fundamental positive change, i.e. SMTs, and also a probable BTC price rise, but not beyond that. At $1.5 per steem, we should be able to achieve half a billion in market cap. This game changing achievement may have nothing to do with SMTs.

Bitcoin ETF
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The talks of Bitcoin ETF have been doing rounds since 2017. At this point I don't care if it comes or not. However, I am not hopeful about it and my prediction is that it will not see light of day in 2020. Well because the decision has been postponed a few times, may be it may pass through but it could also be rejected.

It is true that many pension funds, family offices and other institutional investors, have spent more time learning and understanding about crypto, specially bitcoin during the last 2 years. It is evident from a lot more Hedge fund managers now openly talking about btc on twitter. However, Hedge Funds don't need an ETF and other investors I mentioned can take exposure to BTC by investing in such hedge funds.

Moreover, think about the regulatory attention BTC drew at 20k. Imagine it's scale at 50k. I think with higher price, we'll also see more regulatory scrutiny and that's not necessarily positive for BTC or crypto, as many tokens are pointless and retail guys have too much exposure to them. A higher regulatory scrutiny implies further difficulty for an ETF imo.

Price Action and Development

While 2017 was all about "When Moon?" and "Lambos", the 2 years that followed were all about development. The next year may see that momentum in development continue and good quality projects separating from poor quality ones. The investment money that comes in may also follow that pattern and overall, the total market cap may also see a new ATH.

Central Bank Crypto
This is not going to happen as it is a super dumb idea.

I do think that 2020 will be a year of bulls. Adoption will rise, the network will grow bigger, prices will be higher, and development will continue. My advice is to stick to quality projects with working projects. Also, portfolio should have higher bitcoin, simply because it isn't a security, regulators have studied it and it's purpose and use case has been validated for 10 plus years.

Those are my predicitons for 2020. Let me know some of yours in comments below.

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  ·  last year (edited)

Good write-up and very logical predictions. I agree to most of them particularly the one on Bitcoin ETF. Said the same on my own contest entry as well.

I also agree on the part on Steem. It is going to take a long while for mass adoption when centralized alternatives have greater network effect and convenience. It is going to take quite major turn of events (E.g. a massive security/privacy breach or increased regulations; the government vs big tech narrative). for big techs to fall apart before we can see real traction here on Steem.

I think this post deserves more attention and love. Followed you both on Steem and Twitter. Cheers!

Thank you. I did read almost all entries this time. You mentioned about DeFi in your post which is something I didn't even think about.

Thank you for the appreciation! You will see a lot of useless post from me too, dlike, actifit and sh, a lot of folks can consider those as spam :)

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Posted via Steemleo | A Decentralized Community for Investors

Good morning @karamyog

I just had chance to bump into your old publication - I wonder if you will still check comments ;)

Personally I believe that future of bitcoin and it's price depends mostly on world crypto regulations. Investors do not like uncertainty.

Also, thanks for sharing your thoughts on SMTs. I hope SMTs will not turn out to be dissapointment, since it's major (and pretty much final) real improvement to steem blockchain. And hype is just huge.

Yours, Piotr

@tipu curate

The publication may be old but any new message will come as a new notification so i will check it for sure.