Veteran trader Peter Brandt recently made a bold prediction, stating that bitcoin could reach $50,000 in the next two years.
Credited with forecasting bitcoin’s more than 80% decline in 2018, Brandt cited market history and technical analysis when providing this estimate.
“I believe that charts reflect underlying supply and demand fundamentals and that’s how we have to look at it,” he stated on Yahoo Finance YFi PM.
After bottoming out in 2015, bitcoin prices enjoyed a parabolic advance, emphasized Brandt.
Now, he expects cryptocurrencies will once again enter a parabolic bull market.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
While several analysts emphasized that Brandt’s prediction certainly could materialize, many were understandably skeptical, emphasizing their wariness of price forecasts.
“Peter Brandt’s assessment is purely based on technical indicators and market history,” noted Joe DiPasquale, CEO of cryptocurrency fund of hedge funds BitBull Capital.
“While technical analysis has a place in all markets, past performance is no guarantee for future results,” he stated.
“Meanwhile, however, the current rally is consolidating nicely and we can expect further price appreciation if the trend continues,” added DiPasquale.
Marouane Garcon, managing director of crypto-to-crypto derivatives platform Amulet, urged caution.
“We have to be careful when trying to predict markets,” he noted.
“Parabolic movements happen once in a blue moon,” said Garcon.
As a result, “we can’t depend on them as they tell us more about the crowd’s sentiment than the actual value of the asset.”
He emphasized that while market history can prove helpful, “going forward we have to be more careful because the market has matured and the participants have changed.”
Adoption’s Key Role
Several analysts emphasized the key importance of bitcoin expanding its user base, emphasizing that if the digital currency makes enough progress on this front, it could hit $50,000.
“The focus, I believe, should be on adoption instead of price, because the latter follows the former,” said DiPasquale.
“If Bitcoin adoption continues to grow exponentially in the next two years, we can easily see it hitting the $50,000 mark,” he noted.
“On the other hand, if adoption drives fail and there is no meaningful traction, even $5,000 will be difficult to hold.”
John Hargrave, publisher of Bitcoin Market Journal, also weighed in on this subject:
“As a blockchain gains more users, the price moves up on a quadratic growth curve — similar to [Brandt’s] idea of a parabolic advance.”
Charles Cascarilla, cofounder & CEO of Paxos, offered a similar take.
“The next wave of growth in this cycle will be driven by adoption from mainstream retail and institutions, markets that are order of magnitudes larger than the current users. In that context, $50k seems possible.”