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28 Feb 2022

Three Times Bitcoin Price Prediction Failed

Devansh Sinhal

Bitcoin price prediction is a risky business—one that runs on speculation and luck. That’s why it’s wrong quite often. While analysts can sometimes still vaguely estimate how prices are going to move in the long term, it is very difficult to do so in the short term.

In this article, we’ll explore instances when Bitcoin price predictions have indeed gone wrong, and try to make sense of why they did.

Key Takeaways

  • Bitcoin price predictions try to figure out the short- and medium-term movements of the cryptocurrency. They don’t always succeed, and investors should bear that in mind.
  • McGlone’s prediction about Bitcoin hitting $100,000 by 2021 was off by a factor of more than 40%.
  • Technical indicators predicted that BTC would hit a bull run in 2018. The exact opposite happened.
  • John Mcafee predicted, in the year before, that Bitcoin would be valued at more than $1 million by the end of 2020. Also nowhere close to reality.

What Are Bitcoin Price Predictions?

Bitcoin (BTC) price predictions are about figuring out the short- and medium-term movements of the crypto. These calculations are usually made by analysts with years of experience in the industry and are based on sound technical parameters. Although these calculations are correct often, they can also go wrong. So investors starting out in the market shouldn’t trust them entirely and definitely not blindly. (On a side note, here’s what you could do instead.)

Three Times the Predictions Were Off

At CoinSwitch, we are always reminding readers that these predictions aren’t infallible. In fact, they are almost always speculative. Here are three instances that bear a testament to that fact.

Three Times Bitcoin Price Prediction Failed

BTC to touch $100,000 by 2021

In August 2021, Bloomberg analyst Mike McGlone predicted that BTC would be valued at $100,000 by the end of that year. The credibility of his portfolio at one of the biggest media houses in the world, and the start of a bull market a month after his statements, seemed to validate the idea. Bitcoin reached its all-time high in November, touching the $68,000 mark for the first time ever. Check the current BTC to INR rate. 

Everything seemed hunky-dory until prices came crashing down. Today, a week before the end of February 2022, Bitcoin sits at almost $37,700. It’s still falling, and analysts predict that it could fall even further for some time before showing a rebound.

McGlone’s prediction was off by more than 40%. And that isn’t even factoring in the target that he proposed, or how far we are from it today.

However, there are several reasons for the current fall in Bitcoin prices, and it isn’t as bad a thing as it may seem. BTC’s market cap is getting bigger every day with more players entering the space. As the market for this cryptocurrency gets bigger, more money is needed to account for price changes. As a result, prices stabilize and don’t stay volatile. That’s what’s happening with Bitcoin as well.

As the market matures, the currency becomes more resistant to violent price changes. While that’s great, it makes insane rallies to $100,000 almost impossible in the short term.

The 2018 bear trend break

Technical analysis is fascinating. There are all sorts of patterns, charts, and movements that traders usually track. This information can be used to predict short-term swings and money-making opportunities.

Technical analysis is mostly right if done correctly. However, in mid-2019, almost every technical analyst in the world went wrong.

Three Times Bitcoin Price Prediction Failed

In 2018, the price of Bitcoin started falling, in a typical bearish fashion, creating lower lows and peaks every week. It fell consistently for more than a year, from $19,000 per coin to below $4,000 before the tide shifted. When the bulls took over, the crypto appreciated by more than 200%, from the $4,000 mark to almost $12,000.

This break in the bear pattern was a strong indication that prices would continue to go up for a long time after that. The exact opposite happened.

Even after such a strong break from a bearish pattern with high volumes, prices started falling in September 2019 and kept at it for more than 8 months. Although volumes eventually did pick up, and prices went exponentially high in 2020, the short-term prediction for Bitcoin prices was off by more than 60%—a huge margin for both investing and trading.

John McAfee’s $1 Million bitcoin

John Mcafee, the founder of McAfee Associates, is also a leading businessman and programmer. He predicted, in 2017, that Bitcoin would be valued at more than $1 million by the end of 2020. He is popularly known to have said that this analysis is based simply on “logic”.

His reasoning was that since there’s a limited supply of Bitcoin, at some point, mining is going to stop. He thought that as supply decreased and the demand increased, prices would rise.

It is true that with 7 million BTC already burned, and more getting lost in wallets every single day, Bitcoin is steadily getting scarcer.

McAfee also said that if Bitcoin ended up being responsible for even 5–10% of the total transactions in the world, the coin would be worth at least $10 million apiece.  He felt this is an easy goal to achieve.

Today, in the future, these predictions are nowhere near reality. Bitcoin was worth only about $7,000 at the beginning of 2020. What’s even more surprising is that today, two years later in 2022, the crypto still isn’t even close to $1 million.

Wrap Up

These instances are only three of the hundreds of thousands every single day. Bitcoin price predictions are speculative and not always reliable, and followers tend to lose out on a lot of money. With so many websites out there that have made Bitcoin price predictions their sole job, investors ought to stay wary to some extent. We encourage you to invest in doing your own research, in fundamentally good coins, and for the long term.

With more than 14 million active users, CoinSwitch is a great place to buy BTC and other cryptos!

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Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.

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Devansh Sinhal

Content Writer

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