The question of what to expect from bitcoin is one people have been asking continually for years now, and the truth of the matter is that no one ever really knows the answer. That’s true of valuable commodities in general, but given the extent to which bitcoin is still being introduced to the world, the cryptocurrency has proven to be particularly unpredictable. That doesn’t mean we should stop looking to the future, however, as there are always logical new factors to consider.
For that reason, and without making exact predictions about value, here are some of the things we’ll expect to see and hear regarding bitcoin heading into another new year.
Increasing Day-to-Day Use
One might argue that it’s only natural to expect more day-to-day bitcoin use, at least for the next few years as cryptocurrency continues to expand, and more people become aware of it. Even now, more stores both in the real world and online are exploring the idea of accepting cryptocurrency, and with each new opportunity, more people become curious about using bitcoin as real money. However, we’re also making this point on the basis of a piece Research Snipers posted two months ago that predicted that 50% of the global population may be using bitcoin by 2043. That projection was based on comparing bitcoin’s growth rate with users to that of the internet from the mid-‘90s on and suggests fairly steady growth on a year-by-year basis. Whether or not this comes to fruition over the long term, it does seem fair to expect at least a marginal increase in usage in the coming year.
Growth Based On Fear Of Missing Out
Specific predictions regarding potential value are all over the place, and just about cover the full spectrum. There are still finance and investing experts that believe bitcoin is going to crash completely, and there are still others who think it could reach £75,000 in value within a year’s time. At this point, it’s generally unwise to trust anyone number you see. However, one line of thinking from a collection of price predictions overtime at FXCM caught our eye. Tom Lee, a managing partner at Fundstrat Global Advisors, suggested that bitcoin would reach the US $40,000 within five months if it first reached the US $10,000. The logic was that “full-blown” FOMO (fear of missing out) would affect the market, such that when people see bitcoin reaches a certain point they’ll rush to buy in before missing a wave. So this is a conditional expectation, but if bitcoin sees significant growth early in the New Year, there’s something to the idea of a legitimate spike, at least briefly.
A Halving Effect
Many who only observe cryptocurrencies casually may not have even heard of the term “halving.” Basically, it refers to an occurrence that cuts the number of bitcoins mined in each block in half. Bitcoins are mined through complex computing processes, such that every 10 minutes a “block reward” is added to the network, in the form of a given amount of new bitcoins. Once upon a time, that number was 50 bitcoins every 10 minutes. However, as the finite supply of bitcoins decreases, predetermined halvings occur, such that less of the resource is released at a time. This has happened twice, meaning the number is now 12.5 bitcoins every 10 minutes. Hackernoon has noted that the next halving is set to occur on May 20th, 2020, cutting the number of bitcoins released every 10 minutes to 6.25 – and the last two times this has happened, it has had a dramatic effect on bitcoin’s price. More specifically, halving has caused bitcoin’s price to soar, and while it’s important not to blindly assume the same outcome next spring, it’s only logical to expect that there will be some effect from the halving.
Competition From Libra
Facebook is still expected to launch its own cryptocurrency, libra, sometime in 2020. In some ways it’s an original experiment in the cryptocurrency world – almost its own form of cryptocurrency – and it’s hard to know what to expect from it. Some believe it could cut into bitcoin’s dominance, and some think that the attention it brings to crypto usage, in general, may actually boost bitcoin. Either argument can make sense, but one thing we can expect with more certainty is that bitcoin will face competition from libra in terms of pure attention. There simply has not been an altcoin released before that has as much potential to steal headlines from bitcoin. What that ultimately means for each respective crypto is unknown, but it’s one more thing we’ll be observing in 2020.
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