Forecast for Bitcoin and Ethereum for 2021
Let me start with some proven, historical facts and then I will get to my forecast at the end.
Fact 1: Bitcoin follows a regular 4-year cycle because of the “Halving” process that cuts new Bitcoin supplies by 50% every 4 years. As a result, Bitcoin cycle tends to be much more predictable than cycles in traditional financial asset classes.
Fact 2: Bitcoin’s price has surged during the Halvings. This makes sense because if we were to cut supply into half — particularly when there is a huge demand surge — a shortage develops and the price must rise steeply to induce holders to sell existing stock. Bitcoin typically rises moderately in year 1 and year 2 of the cycle. It then explodes higher in year 3 and that is when investors have historically made the biggest, blow-out gains. After the 1st Halving (late-November 2012), Bitcoin surged 9,212% for 54 weeks. After the 2nd Halving (early-July 2016), it rallied 2,910% for 74 weeks. If history is any guide, Bitcoin investors stand to make the biggest profits of this current bull-market cycle (whereby the 3rd Halving took place on 11th May 2020) PROBABLY in 2021.
Fact 3: In 2017, Bitcoin rose from just under US$1,000 to nearly US$20,000, delivering up to 20 times gains to investors. On the other hand, Ethereum rose from about US$8 to a high of nearly US$1,400 approximately 1 year later. That was a 159-fold rise, giving investors 8 times BETTER gains than Bitcoin.
This time round, the Bitcoin market is far more liquid and mature as compared to 2017. As a result, it implies less relative risk, but also less profit potential. Conservatively, assuming Bitcoin goes up only half as much as it did in 2017, investors MAY make 10 times or 1,000% gains in the current phase of this bull-market cycle. I am expecting Bitcoin to hit US$100,000 PROBABLY by 4th Quarter of 2021.
On the other hand, to be conservative, this time round investors should not expect Ethereum to deliver that much like what it did in 2017. Based on my forecasting model, it is more reasonable to expect Ethereum to outperform Bitcoin by about 3 to 1. That means an estimated profit potential of 30 times or 3,000%. I am expecting Ethereum to hit US$5,000 PROBABLY by 4th Quarter of 2021.
I know these projections may sound crazy. Mark Twain is often attributed with the saying — “History doesn’t repeat, but it often rhymes.” I just want to say there is more than a 50–50 chance that the price of Bitcoin and Ethereum can go up, and goes up BIG as capital flows from the public debt to private asset like cryptocurrencies due to the collapse of confidence in governments as Sovereign Debt Crisis (SDC) converge with Global Monetary Crisis (GMC) in 2021/2022.
** Please note that what is being shared in this article is NOT meant to be regarded as an advice or a recommendation, it is meant for EDUCATIONAL AND INFORMATION PURPOSES only and it does not constitute an investment advice, an offer or solicitation to purchase or sell the investment asset classes mentioned. **
