Experts say COVID-19, DeFi, unprecedented fiscal stimulus and a shift to digital payment solutions all have a part to play.
Bitcoin (BTC) has been the king of crypto since its inception and it doesn’t look like its reign is about to end anytime soon. Of the 11 coins included in Finder’s latest Cryptocurrency Predictions Report, a panel of 30 experts were most positive (73%) on their outlook for Bitcoin. In fact across all Finder’s reports done in 2020, BTC held the top spot throughout, sharing the crown momentarily with Ethereum (ETH) only once in April. This quarter, ETH follows not too far behind with a positive sentiment score of 67%.
NDAX Inc. CEO Bilal Hammoud, who expressed a positive sentiment only for BTC and ETH, thinks this is because “Bitcoin has proven to be the safest form of digital money to trade and hold for now due to the unique characteristics of scarcity, network security, and adoption [of] coins like Litecoin [and] Bitcoin Cash will have a very hard time competing.
“Ethereum has proven to be the best platform for blockchain innovation due to the ease of use and the large community backing, it will be difficult for other blockchains to compete without major breakthroughs. The world of remittance is growing and there is no clear winner yet,” he said.
However, Finder’s panel isn’t bullish on every coin – 6 of the 11 coins, including Bitcoin Cash, Litecoin and XRP, on average garnered negative outlooks from the panel. eToro crypto commentator David Derhy believes crypto adoption is becoming more rampant, but says retail investors are looking to some coins over others.
“Crypto adoption is growing and regulation is becoming clearer. But while some crypto assets such as Ethereum or Binance Coin have shown real ambitions in becoming an important actor in DeFi and in creating the future of finance, some others such as Litecoin have lost interest from retail investors,” he said.
Bitcoin pegged to be worth nearly $150,000 by 2025
The panel’s bullish forecast for Bitcoin didn’t end there. By the end of the year, panellists predict Bitcoin to be worth US$14,283 per BTC on average – a 10% increase from the US$12,948 end-of-year prediction made in July.
LMAX Group currency strategist Joel Kruger forecasts the second-highest end-of-year BTC price at $20,000. However, he cautions that it won’t be an entirely smooth run.
“We believe things could be quite volatile for Bitcoin between now and year end. We think the price could initially be vulnerable to a downturn in global sentiment, much like was seen in March, before ultimately being well supported on the longer term value proposition as a highly attractive store of value asset,” he said.
Panellists like University of East London’s Iwa Salami and University of Reading associate professor Andrew Urquhart think the COVID-19 pandemic is bringing increasing interest around BTC and in turn, this drives its price up.
“Investors would continue to look for other assets (such as Bitcoin) as a hedge against inflation and to protect their assets against devaluation. This is likely to drive the price of Bitcoin up. Also, with the increasing popularity of DeFi, this is likely to drive up the price of cryptocurrencies and in particular Bitcoin and Ethereum,” Salami said.
Based on the panel’s forecasts for 2025, BTC might not plateau there. In fact, in five years panellists predict that on average the price of BTC will be at $148,025. However, if we remove the most bullish prediction at $2,000,000, this leaves us with an end-of-2025 price of $67,504 – still a significant 373% increase from the predicted end-of-2020 price.
Arcane Research analyst Vetle Lunde predicts BTC will be priced at $100,000 by the end of 2025 due to intense fiscal stimulus.
“COVID-19 has led to fiscal stimulus at an intensity level never before seen. This could have dramatic monetary implications in the long-run. This has attracted several well-renowned investors to invest in Bitcoin as an inflation hedge. With it’s known, low, fixed inflation rate, Bitcoin provides scarcity in a world filled with abundance,” he said.
Nottingham Trent associate professor Jeremy Cheah and Thomson Reuters technologist and futurist Joseph Raczynski predict more modest price increase forecasts at $18,000 and $35,000 respectively. Both chalk up the increase to the rising popularity of digital payments.
“…as the world moves to digital currency, though not the best system, BTC will likely still prove as the original – a very good store of value. First movers have often significant sway, this is likely one of them that’s able to keep its position and prominence,” Raczynski said.
Ethereum set to cap off 2020 at just over $500
Some of Finder’s panellists noted Ethereum has benefited from DeFi’s boom and say the upcoming launch of ETH 2.0 will continue to push prices higher. Around two-thirds of the panel (67%) hold a positive sentiment for the coin and on average they predict the price of ETH will be at $513 by the end of the year.
BC Bitcoin sales manager Tyler Smith predicts ETH will cap off 2020 at $450 and believes that traction from projects making use of its infrastructure will contribute to higher prices.
“Ethereum has consistently delivered a stable and scalable blockchain solution with many other projects making use of its infrastructure. This trend will likely continue making it a good investment opportunity for the future,” he said.
Meanwhile Wave Financial associate Andrew Ballinger, who had a $350 end-of-year forecast, acknowledges DeFi’s positive impact on ETH. However, he notes that growth will not always be this incredible.
“The growth of DeFi has positively affected ETH, but the correction in DeFi tokens means that the early days may be behind us, and growth will take on a more sustainable rate. There are also potential regulatory hurdles on DeFi’s horizon,” he said.
Similar to BTC, panellists anticipate that ETH prices will increase exponentially in the next five years. By 2025, ETH is forecasted to be priced at $2,075 on average – a 304% increase from 2020’s end-of-year prediction.
OKCoin COO Jason Lau expresses his confidence in the ETH community when commenting on his end-of-2025 price prediction of $2,000. Likewise, Finder co-founder Fred Schebesta, who predicts that ETH will be worth above $3,000 by the end of 2025, says it still largely depends on the development of the ETH blockchain and community.
“Unlike Bitcoin whose value is largely pegged to it holding the undeniable pole potion as a store of value asset, Ethereum (while leading), has some tough competition it will need to continue to conquer and continue to demonstrate reliability, iteration and value before any flags can be waved in victory,” he said.
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