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Bitcoin Will Hit 20k By January

Bitcoin (blue) and Ethereum (red) market price in USD, plotted logarithmically.

Disclaimer

To begin, the ideas and conclusions in this article are the opinion of the author and should not be construed as actual financial advice. I am simply saying what seems obvious to me.

Price History

Currently, there is a lot of bearish talk regarding bitcoin and crypto in general, which is understandable given the gains the whole sector has posted the last year or two.

Looking at the logarithmic price of bitcoin, it becomes obvious that it has indeed endured heavy selloffs of up to 50% multiple times in its history, typically following an exponentially sharp price increase; these sharp increases seem to happen after the previous gap is closed, e.g., twice in 2013, and now in 2017.

As we look at the current prices, it doesn’t seem like that sharp increase has happened yet, although it is gaining steadily after closing its previous gap; in fact, it seems that the gains bitcoin has put on the past few years were more gradual and rational than ever, as opposed to almost 300x in less than 2 years during 2012–2014.

Bitcoin is more popular than ever, being googled almost 4x as much as 4 months ago. Kim Kardashian’s declining popularity is shown in red.

What’s Next

With bitcoin being more popular and talked about than ever, and with financial institutions becoming increasingly desperate for exposure to blockchain technology, my gut tells me that there are billions of dollars waiting to pull the trigger as bitcoin pushes past $10k.

When the price does not falter, as it does not seem to be doing, billions of dollars in investment will jump in at once and, compounded by fear of missing out, this will result in another 5–10x increase before a long-term correction. I just don’t see a massive selloff as possible in the near future given the gradual, paced nature of BTC’s returns this year with respect to its past.

Everyone’s eyes will be on bitcoin this month, as $10k a coin was a goal that the community had been anticipating for almost a decade; it is a number that is inherently disillusioning and this presents a psychological advantage — a chance to enter. From the volume and the order book, it is clear to me that the buy interest is still there and that sellers are holding for the long term. Bitcoin is in the perfect setup for the rapid 10x that has been required so far in order for it to enter a 1 or 2-year bear market. Until that happens, the data seems to indicate that there’s literally not enough people willing to sell to trigger a selloff, loaning additional credit to the concept of the 21 million club in the long term (versus the short term, the next 3–5 months, which is the focus of this article).

$100k by March may sound ridiculous, but if you have been trading bitcoin for longer than a year or so, remember, bitcoin is $10,000 apiece right now (we did it!). All of the smart people have admitted by now that this doesn’t make sense to them, and there is a clear reason why: This is a disruptive technology, and all of the rich people are late to the party.

The financial sector is finally taking interest, and people that buy in before them will be paid to do so, as they have been so far. This sector is headed for a trillion dollar market cap and there’s nothing anybody can do to stop it.


Update— 12/4 8:30PM CST

After this article was published this morning, the CBOE announced that it will offer the trading of bitcoin futures on December 10. This is only further evidence that BTC has yet to be saturated as far as institutional interest goes.

Update — 12/5 8:30PM CST

Bitcoin is currently trading above $12,000. When the article was initially published not even two days ago, its price was less than $11,000.

Update— 12/8 2:00AM CST

Bitcoin is currently trading at nearly $16,000 per, having ran to over $18k this morning on Coinbase.


If you need to purchase bitcoin or ethereum, the author recommends Coinbase, where you can get your coins in as little as a few minutes.

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