When it goes about the crypto market, it seems there are no right forecasts at all. Really, we do not know much about a new type of money. Bitcoin, the first cryptocurrency, was released in 2009, just 11 years ago, and now we have a crypto market with the capitalization of billions USD, which appeared almost from nowhere. So, the experts can promise the various price for Bitcoin in 2025 – from $1,000,000 to 0.0000001 – and each of the forecasts can come true.
Of course, the crypto trading is not limited with Bitcoin: Ethereum, Monero, Litecoin, and other currencies present approximately half of the market. However, Bitcoin dominates the crypto world. Due to zero inflation risk, Bitcoin is trending, and its CAGR (compound annual growth rate) is expected as 3% in the period 2019-2024. So, any analysis and forecast should take the Bitcoin perspective in attention.
The crypto market follows the same principles as other financial markets. Technical analysts claim they can see Japanese candles and other indicators on the graphs. The reasons in simple: many market indicators reflect human behavior, not the real cost of the stock. The experienced analyst can track and find the same movement patterns and build the graphs for future changes.
Factors on influence in crypto industry
Several factors influence the cryptocurrency market. Despite the different weights, each on them is important. Moreover, each of these factors can break the forecasts for the future. So, it is necessary to follow them for a better understanding of the market. We defined several main crypto industry trends.
Major economic and political news that influence forex and stock markets has a weak impact on the crypto market. The unemployment rate in the USA, trading war between USA and China, the new interest rate in ECB, can launch the storm for the currencies and securities. However, the pool of specific crypto-related news is the major factor of influence and the locomotive force for market volatility.
New government regulations and other movements of the authorities are in the focus of the crypto market. Besides, this market is sensitive to its updates – the successful launch of the new platforms, price updates, moves of the significant players, et cetera.
The pool of crypto experts is heterogeneous. On the one hand, cryptomarket pays respect to the technical experts, the owners of large crypto startups, major market investors, and others. On the other hand, the crypto market is full of social climbers – the YouTube bloggers, news writers, self-promoted traders, and other loud-mouths.
So, it is not a simple task to distinguish the real expert opinion and a fake. That is why expert opinions influence the market, but the reaction is also short-term. When the market players understand they face a fake, they stop the transaction and begin to wait for real news.
The main difference between news and rumors is the possibility of checking the information. The market news is based on real events, economic trends and indices, and other searchable data. At the same time, the rumors are based on opinions and quotes. However, the thousands of investors buy and sell cryptocurrencies basing on the rumors. These transactions activate price fluctuations.
In 2017, when the cryptocurrency market was on its peak, the smallest news could move the prices up and down. However, in 2020 the crypto market is calmer. For example, the “sensational news” that Elon Musk plans to invest $ USD million to Bitcoin can hardly impress the investors. However, the rumors are the method to manipulate the market, so it cannot be said that the crypto market stays invulnerable to it.
Cryptocurrencies exist on the base of blockchain systems; it is probably the first high-tech payment method. However, the technologies do not exist in a vacuum: they develop and continuously change. Significant changes in technology can insult the cryptocurrency market, but usually, they do not happen suddenly, and the market has enough time to adapt.
For example, in 2020, the crypto world waits for the new Bitcoin halving. Bitcoin halving is a process of dividing the number of generated rewards per block to maintain the total supply of Bitcoin, which will not exceed 21 million. The previous halving attracted the attention to Bitcoin and pushed its price up. There is no reason to wait for another scenario this year.
In the financial markets, gold is known as a leading reserve active. When the prices of fiat currencies go down, financial investors switch to the reserves: gold, silver, and commodities. Cryptocurrencies are also an alternative option for investments in the time of economic turmoil. The increased demand for metals pushes the gold price up, and investors start buying Bitcoin.
In 2020 the gold price hit the new maximums because of coronavirus pandemic. China is the largest global gold exporter, and the production in this country stopped for several weeks of quarantine. The limited metal production resulted in the gold price growth and skyrocketing demand on Bitcoin. However, the further economic downturn can disappoint the investors and withdraw them from the volatile cryptomarket.
Cryptocurrencies Trends 2020-2023
Taking in attention the main factors of influence, any crypto player should also follow the main crypto trends 2020-2023. Of course, everything can change very fast: at the beginning of 2020 nobody expected the coronavirus pandemic and global quarantine together with the economic crisis in the leading global economies. We created the forecasts basing on the current market situation and hope the main crypto trends stay alive under any circumstances.
Bitcoin: Halving 2020 and COVID
As we mentioned above, the previous halving of 21 million Bitcoin attracted the attention of investors. The reason is simple: a shortage of new Bitcoin supply pushes up the price. Besides, the growing price makes a bitmain more profitable, the mining goes faster, and the end of bitmain becomes closer. When the mining farms, most of which are located in China, stop working, Bitcoin faces a serious challenge. However, after the turmoil it recovers its positions. So, at least in 2020 Bitcoin will stay on the top: we did not expect a new crypto winter.
Besides, Bitcoin benefits from the epidemic. At the period of volatility on financial markets, the investors turn to reserve actives: metals, commodities, and crypto currencies. Moreover, in the post-pandemic world, the disappointment with the traditional economics and fiat currencies will push new players to the crypto world. As the oldest and the most reliable currency, Bitcoin will stay the flagman and define the main crypto currencies trends.
Just the exciting fact: Tom lee, former JP Morgan analyst, believes the fair price for Bitcoin is $14800, but it can grow up to the $150,000 when the number of Bitcoin wallets reaches 7% from the number of Visa card (for now in is 4,5 bln). Anyway, the forecast for Bitcoin in 2020-2023 is moderately positive.
Altcoins: Following the Leader
Among the altcoins, the absolute leader is Ethereum. Famous stock market Nasdaq added Ethereum together with Bitcoin to the list of its indices. Its leading position is based on the fact that Ethereum is not only the crypto coin but also the platform for many blockchain projects. However, Ethereum faced the problem with scalability. When the number of Ethereum-based projects increased, the platform could not process the remittance. The world still waits for corporate applications based on Ethereum. If a service like Uber launches the blockchain applications with the payment by cryptocoin, the Ethereum stays with us for many years. Otherwise, it can end as a dead coin. The forecast is moderate.
The phenomenon of Ripple is that there is no single opinion about its nature: some market analysts do not believe it is a crypto coin because of the absence of mining. However, 50 major banks and financial organizations started a partnership with Ripple. The banks usually play against the crypto trends, but not with Ripple. The main challenge for this coin is to press out Swift from the market. If it happens, the forecast can be increased from moderate to positive.
EOS is the rising start of recent years and the main competitor of Ethereum. This platform can support corporate applications without the problem of scalability. So, if Ethereum fails in the challenge, EOS can replace it. For now, the forecast is positive.
Monero is still at the top of the most popular cryptocurrencies list. It is known as the most secure cryptocurrency. However, it can lose its position. It seems 90% of transactions can be tracked. Even after the last for the number of secure transaction is no more than 50%. The forecast is moderate to low.
Looking at the Future
Have you ever heard about the self-fulfilling prophecy? This interesting socio-psychological phenomenon demonstrates the ability of human belief to influence the future. The prophecy comes true because many people believe it will. Their beliefs influence their actions, and their resulting behaviors align to fulfill those beliefs.
In 2020 Netflix released the second season of Altered Carbon, cyberpunk series. The plot takes place in the early 25th century. Surprisingly, the dark and gloomy half-legal shop accepts cryptocurrencies – Bitcoin, Litecoin, Monero, and Z-cash. Why the creators of the series believe people will use crypto 400 years after us?
The answer is that national currencies can lose their value during further globalization and probable space expansion. When humanity is spread out across several planets, it is hard to find the universal equivalent – but cryptocurrencies can fill in this niche. And, if people believe that cryptocurrencies will exist in the 25th century, this prophecy has an excellent chance to come true.