Pundits and crypto analysts love to issue Bitcoin (BTC) price predictions regardless of how volatile the asset class is.
In 2017, there were calls for BTC’s price to hit $35,000–$50,000, and of course, a few brave souls predicted that the price would top $1 million before correcting.
No one will forget how John McAfee infamously promised to chomp off his genitals if BTC’s price didn’t hit $1 million by 2020.
While some of these lofty estimates are based on fundamentals, others are entirely baseless. Regardless of the analyst’s rationale, a handful of them are so far removed from reality that they have become memes.
Let’s review the most outrageous Bitcoin price predictions of 2020.
“Guesstimation” attracts attention because nobody follows them up
Guessing the future price of cryptocurrencies is so embedded in the community that many analysts don’t even consider evaluating their effectiveness. Keeping up with the endless flow of predictions issued on blogs, podcasts, Twitter and YouTube is almost impossible. Imagine the difficulty and energy it would take for a person to follow up with all these random guesses.
To further complicate matters, some of these predictions come from well-known Bitcoin bashers, such as renowned gold bug Peter Schiff, and New York University Stern School of Business professor Nouriel Roubini. Thus, in some cases, personal credentials sometimes matter less than working analytical models.
A month before the March 12 crash, which saw Bitcoin’s price plummet 50% to $3,750, PlanB, the creator of the stock-to-flow model stated that Bitcoin would not return below $8,200. At the time, no one expected the Dow Jones equities index to face its most significant drop since 1987, neither the WTI oil future contract dropping to negative $40.
Despite the outlandish claim, PlanB won’t be nominated to 2020’s worse predictions because hardly anyone expected the coronavirus pandemic to impact the markets in a way that would cause absolute havoc. Furthermore, famous chartist Peter Brandt also made the same error when he said that BTC would never revisit the sub-$6,000 level in January.
CryptoWhale’s quantum model calls for $24,000 BTC in mid-2022
On June 2, 2020, Twitter analyst CryptoWhale revealed a new “quantum” model that would predict Bitcoin’s price. According to CryptoWhale, the model had “effectively predicted every major move since 2018.”
Things could not have gotten worse as the model predicted both a $2,000 bottom in 2020 and a “proper bull run to $24,000” only in mid-2022. Somehow, the quantum particles, molecules and atoms that were supposed to make it more accurate were, in fact, pure blasphemy.
Two lessons that can be taken away from the “quantum model” are: (1) Having a ton of social network followers doesn’t necessarily translate to better price estimates, and (2) complex models are prone to the same errors as humans. Evaluating a new…