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With the price of Bitcoin down 63% from its December highs, signs the cryptocurrency will regain those highs have been few and far between.
But a new Bitcoin price prediction chart from Wall Street research firm Fundstrat suggests BTC will get back to those highs and beyond, reaching $36,000 by the end of 2019.
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Fundstrat isn't shy about creating its own Bitcoin market indicators and has a reputation for bullish Bitcoin predictions.
Back in January, Fundstrat analyst Tom Lee set a Bitcoin price target of $25,000 for 2018 and a long-term target of $125,000 by 2022.
The latest from Fundstrat is a chart based on the breakeven price for the Bitcoin miners. It's the point where the miners can make a profit after covering for their expenses, like mining rigs and electricity costs.
By plotting the chart all the way back to 2013, Fundstrat discovered a pattern that suggests a fivefold increase in the price of Bitcoin over the next 19 months may be too conservative...
The High End of This Bitcoin Price Prediction Is $64,000
This chart is based on the idea that multiples of the breakeven price for the Bitcoin miners create an approximate channel for the trading price of Bitcoin.
Take a look at just how accurate those price channels have proven to be, as well as what that means for the future price of Bitcoin...
The lower bound of the channel is the point where the trading price of Bitcoin matches the breakeven price for the miners, seen on the chart as 1x.
The center of the channel is the historical average of this ratio, which has been 1.8x. In other words, Bitcoin historically has traded at 1.8 times the breakeven price for the miners.
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Despite the steep drop in the Bitcoin price over the past five months, the price is still very near this middle line - just about where it should be. The chart suggests last fall's price spike was indeed a bubble bound for a much-needed correction.
The upper bound of the channel is 3.2x. Fundstrat Head of Research Sam Doctor based this on the standard deviation. For the most part, this line has served as an upper bound on the Bitcoin price.
Over the past five years, the chart's channels have been surprisingly on target - a good sign for the forward projections, which reflect trends we're seeing in Bitcoin mining.
Doctor expects hash power - the measure of the computing muscle used in Bitcoin mining - to rise 350% by 2019. That will require heavy capital expenditures by the miners to keep up, raising the breakeven price as the chart predicts.
That's good news for the price of Bitcoin.
"We believe the current path of hash power growth supports a BTC price of about $36,000 by 2019 year end, with a $20,000-$64,000 range," Doctor said in his report. The top and bottom of the range are projections of the upper and lower bound lines (the 1x and 3.2x lines).
The historical average line (the 1.8 line) suggests a price of $36,000. That's nearly five times the current BTC price of $7,300. The upper limit of $64,000 represents a potential gain of 777% over today's prices.
But as Bitcoin price predictions go, $64,000 is on the low side. Several Bitcoin price forecasts made over the past year have set the target much, much higher...
Long-Term Bitcoin Price Forecasts for $100,000 and Beyond
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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.