The latest wave of 2016 Bitcoin price predictions exhibit a renewed optimism about the digital currency's prospects.
That's not too surprising, given that the price of Bitcoin doubled from the low $230s to over $480 in just over a month, from late September to early November. And while the Bitcoin price has settled back to about $380 over the past week, it's still about 64% higher than it was six weeks ago.
Coming after months of relative stability in the $200 to $300 range, the sudden spike in the price of Bitcoin reignited interest in the digital currency and its future.
And the 2016 Bitcoin price predictions that have followed reflect a fresh understanding in the disruptive power of Bitcoin's underlying technology, the blockchain. As Bitcoin becomes increasingly integrated into the world's financial system, its value will necessarily rise.
That's because built-in scarcity will combine with the rising demand to push Bitcoin prices up. You see, new Bitcoins are mined at a fixed rate. And only 21 million will ever be created, with the last due in the year 2140.
This 2016 Bitcoin Price Prediction Is Up 50%
Such considerations led Gil Luria, an analyst with Wedbush Securities, to raise his 12-month Bitcoin price prediction from $400 to $600 last week.
"We believe bitcoin and its associated blockchain technology have the potential to disrupt the existing financial infrastructure over the next several years, and believe the value of the Bitcoin currency (BTC) will benefit from this trend," Luria wrote in the report.
Luria's forecast is based on Bitcoin adoption projections out to the year 2025. He estimates that in four main categories - online payments, remittance, micro transactions, and "banking" for the unbanked - Bitcoin will pick up a market share of 10% to 20%.
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Luria's $600 is the present value of what he believes the 2025 Bitcoin price will need to be in order to support the dramatic increase in Bitcoin-based transactions over the next 10 years.
Given its limited use right now, Luria says a Bitcoin really only needs a value of about $24 today. In other words, at $380, Luria believes Bitcoin today is $356 higher than it needs to be.
But his Bitcoin price predictions for five years out and beyond are truly eye-opening. Take a look at this...
How the Bitcoin Value Could Skyrocket
Luria's detailed analysis looks at how Bitcoin adoption will affect the Bitcoin value on a year-by-year basis.
Although he cautions investors on the uncertainty over predicting the value of something as new and disruptive as Bitcoin, his forecast offers a glimpse into a very likely scenario.
Impressively, Luria sees the Bitcoin value more than doubling to $53 in 2016, again to $123 in 2017, and again to $269 in 2018. Those Bitcoin values are all still well below the current Bitcoin price.
But after that is when Luria's Bitcoin price predictions get interesting.
For 2019, he projects the Bitcoin value at $608, which more than doubles to $1,429 in 2020 and again to $2,896 in 2021. That rate of growth doesn't slow until 2025, when the Bitcoin value hits $17,473.
Luria uses that final figure to get his present value of $600 for Bitcoin. But if adoption follows the path he expects, the Bitcoin price will need to be at least $17,473 in 2025. That represents a potential gain of 4,500% over the next decade.
Other 2016 Bitcoin Price Predictions
Rank-and-file Bitcoin enthusiasts mostly agree with Luria, according to two recent online polls.
These polls aren't scientific (the respondents are anyone who chooses to vote) but give an idea of what the typical Bitcoin user thinks.
In a CoinDesk poll released yesterday (Monday), 38.7% of the voters said the Bitcoin price would start 2016 between $351 and $500, while 33.4% said the price of Bitcoin would reach the $501 to $1,000 range. Only 10.6% believed the Bitcoin price would retreat to between $201 and $350.
A similar poll on the CoinTelegraph site got similar results. Of those who voted, 20% made a 2016 Bitcoin price prediction of $400 to $500, while 37% estimated the Bitcoin price would jump to $500 to $1,000. One-quarter said the 2016 Bitcoin price would zoom past $1,000. Just 16% thought the price of Bitcoin in 2016 would go below $400.
CoinTelegraph also solicited 2016 Bitcoin price predictions from several leaders in the Bitcoin world.
"Investors will again realize that Bitcoin is the most valuable blockchain and I expect 2016 to begin the year in the US$500-$550 range after profit seekers unload and long-term investors accumulate. I expect the long-term investors to win and push the price further," BnkToTheFuture CEO Simon Dixon told CoinTelegraph.
Most of these 2016 Bitcoin price predictions fell into that range. Factom founder Paul Snow and Bitrefill CEO Sergej Kotliar both pegged the 2016 price of Bitcoin at $500. UBITQUITY CEO Nathan Wosnack was more optimistic, predicting Bitcoin would hit $777 in 2016.
The wide range of 2016 Bitcoin price predictions goes to show how hard it is to envision the ultimate impact of the cryptocurrency. But one trend is clear - most of those who have spent a lot of time studying and working with Bitcoin are convinced that its value over time will go up - way up - from where it is today.
Follow me on Twitter @DavidGZeiler.
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Related Articles:
- CoinTelegraph: Poll: What Will the Bitcoin Price Be in 2016?
- CoinDesk: Poll: 48% Believe Bitcoin Will Be Worth Over $500 by 2016
- Scribd: Wedbush November Report
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.