The expansion of the use of cryptocurrencies and changes in regulatory principles will determine how much Bitcoin will cost in 2019. Optimists are counting on a new rise in the price of digital currencies, the cost of which will reach a historical maximum. However, pessimists warn of significant risks that could lead to a market collapse.

The Bitcoin rate in 2019 is $5559 per coin.

Market factors

The digital currency market maintains a significant level of volatility. In February 2018, the Bitcoin rate fell to 7,000 USD/BTC, which was the minimum value over the past three months. At the maximum, quotes reached 20 thousand dollars. In the future, experts are considering several scenarios for the development of events:

1. An optimistic forecast for the Bitcoin exchange rate suggests a significant increase in quotations in 2019. As a result of the rapid increase in demand, the cost of cryptocurrency will reach 50-60 thousand dollars. This opinion is shared by the representative of Prime Capital Investment Company Svetlana Ivanova.

In the most favorable scenario, the price will exceed 100 thousand USD/BTC, says expert Yuri Pripachkin. The growth rate of cryptocurrency will correspond to the dynamics of 2017. This trend will be associated with the influence of the following factors:

• expanding the scope of application of digital currencies, including the introduction of derivative financial instruments;
• legalization by central banks;
• development of the technological base, which will increase the level of system security.

1. The base scenario assumes continued high levels of volatility. Alpari representative Natalya Milchakova predicts a significant slowdown in the growth of digital currencies. In addition, the number of correction periods will increase.

First of all, the dynamics of the Bitcoin exchange rate for 2019 will be determined by new restrictions from financial regulators. Next year, central banks intend to take control of operations in the cryptocurrency market, which will affect the decline in demand. As a result, quotes will change in the range of 15-30 thousand USD/BTC.

1. Pessimists predict an imminent collapse of digital currencies as a huge bubble has formed in the market. High prices are supported by the influx of speculative capital. This factor is the main threat to market stability. In the event of a new collapse, prices will reach the range of 1-3 thousand USD/BTC.

In addition to the actions of speculators and new bans from central banks, experts note the following risks for the Bitcoin exchange rate forecast for 2019:

• increased competition from altcoins, primarily Etherium and Ripple;
• existing network limitations, which will become a problem with a further increase in the number of users;
• lack of a common vision among developers regarding the future of BTC;
• high commissions at low transaction speeds.

Prospects versus new challenges

A key factor for the prospects for the Bitcoin exchange rate in 2018 and 2019. remains the position of financial regulators, says Saxo Bank strategist Kai Van-Petersen. First of all, the forecast for price dynamics in the near future depends on changes in Chinese policy.

Emerging markets fear outflows financial resources through operations on the cryptocurrency market. In such conditions, digital currencies will lose their main advantage - the lack of control and anonymity of transactions. In 2018-2019 existing gaps in the legislative field will be eliminated, which will affect the forecast for the Bitcoin exchange rate.

The Chinese authorities are seriously concerned about the lack of control over digital currencies. These assets can be used to remove capital from the economy, which will lead to a slowdown GDP growth. As a result, the People's Bank of China may decide to strict restrictions, which will be a new shock for cryptocurrencies.

Russia's future policy also remains in question. Analysts do not rule out the expansion of control by the Central Bank, which will lead to a significant reduction in the number of transactions. In addition, Russian miners may be under attack - the most pessimistic scenarios involve a ban on this type of activity on the territory of the Russian Federation.

Professor Jeffrey Sachs does not see prospects for the development of Bitcoin in the near future. Forecast for 2018-2019 assumes a rapid collapse of the exchange rate, which is associated with the impact of fundamental factors.

The dynamics of Bitcoin prices in 2017 confirms the irrational nature of price movements. A huge bubble has formed in the market, Sachs notes, which will lead to the inevitable collapse of the digital currency.

The main driver of the market remains the desire of investors to maximize their own profits, without taking into account existing risks. Such actions of speculators have repeatedly become the cause of large-scale financial crises.

In addition, Sachs negatively assesses the advantages of Bitcoin - independence from the policies of the central bank and anonymity of transactions. In fact, it is an asset that has nothing behind it. The use of cryptocurrencies will remain extremely limited and will never reach the scale of traditional assets. Also, in the near future, opposition from financial regulators will increase, who cannot ignore the growing popularity of cryptocurrencies. As a result, all transactions will be strictly controlled by authorities.

Bitcoin rate by month in 2019

Let's look at the Bitcoin exchange rate forecast starting from the second quarter of 2019:

• April - Beginning of the month - $4113, maximum value - $5947, minimum - $4083. Change by 35.1%;
• May - Beginning of the month - $5558, maximum value - $7433, minimum - $5089. Change by 3.0%;
• June - Beginning of the month - $5726, maximum value - $6585, minimum - $5723. Change by 7.5%;
• July - Beginning of the month - $6154, maximum value - $7340, minimum - $6154. Change by 11.5%;
• August - Beginning of the month - $6860, maximum value - $6860, minimum - $5839. Change - minus 8.5%;
• September - Beginning of the month - $6278, maximum value - $6278, minimum - $5454. Change minus 6.6%;
• October - Beginning of the month - $5864, maximum value - $5864, minimum - $4581. Change minus 16%;
• November - Beginning of the month - $4926, maximum value - $5047, minimum - $4387. Change minus 4.2%;
• December - Beginning of the month - $4717, maximum value - $4757, minimum - $4135. Change minus 5.7%.

Look video with Bitcoin price forecast for 2018 and 2019:

Atlantico: As The Telegraph writes about the current Bitcoin trading frenzy, “If this is a bubble, we are now dealing with a manic phase before a crash.” With volatile Bitcoin trading above $11,000 this week, what is the risk level of a currency that Goldman Sachs now treats as a “commodity”?

Philippe Crevel: In 2016, the Financial Markets Authority noted that 90% of investors who reached financial market, ended up losing money, in some cases significant amounts. It is likely that the same thing will happen with Bitcoin, a cryptocurrency whose exchange rate is far from stable and predictable. Is it possible to imagine that the value of the euro will increase tenfold in a few months? Currency is primarily a standard, an instrument of exchange and storage, and not a speculative commodity.

By the way, it was for this reason that in 1976 currencies were freed from their peg to the dollar and a floating exchange rate was introduced.

At the same time, this virtual currency, which was created in 2009 by a group of unknown specialists under the pseudonym Satoshi Nakamoto, is characterized by chaotic fluctuations, which is especially noticeable against the backdrop of the recent rise in its rate. Such a trend should be based on rational economic considerations such as GDP growth, population growth, increased productivity, trade links... As for Bitcoin, transparency is built into its structure, but this is not the case for its creators.

Bitcoin is a cryptocurrency that is based on blockchain technology and is accompanied by payment system p2p. Everything works without central control, in a decentralized manner thanks to the consensus of all network nodes. The issuance of bitcoins (the cap is set at 21 million) is carried out by users who provide their available computing power to verify, record and encrypt operations on blockchains. This activity is called “mining” and requires significant computing power and energy consumption. As Reuters wrote, in 2015, Bitcoin networks used 43,000 times more electricity than the 500 most powerful operating computers in the world. In 2020, it could require 14,000 MW, which is half the electricity consumption of New England in the US or the whole of Denmark. Given the exponential growth in production costs, Bitcoin creators are uniting in “farms”. In 2016, 95% of activity came from a dozen cooperatives. China is slowing down the use of Bitcoin, but has become a specialist in its production (72% of all mining). They decided to develop this area of ​​activity in Russia as well.

In the future, Bitcoin will in any case need to change its algorithm to reduce energy costs. Lack of transparency in terms of release is another weak side virtual currency. Regarding fraud, all transactions are verified by the network nodes and recorded in a public ledger, which is considered impossible to falsify (blockchain principle).

If we return to the risks associated with Bitcoin, given the current exchange rate, they are very high. The bubble can burst at any moment. Those who are not afraid to take risks need to be ready to sell their cryptocurrency at any time as quickly as possible.

— French laureate Nobel Prize in economics, Jean Tirol considers Bitcoin a pure financial bubble. Most agree with this point of view. What then is the reason for the current growth? Do you know who invests money in Bitcoin?

— Bitcoin's fluctuations and its recent rise are giving it greater visibility and pushing some financial institutions to the formation of new types of deposits with an emphasis on their profitability. Bitcoin is being used by an increasing number of economic actors. So, in 2017, more than 100,000 sites accept it as a means of payment, including PayPal, WordPress and the travel agency Expedia. The Red Cross and Greenpeace also accept donations in Bitcoin. Bitcoins can even be obtained in physical form with 1,778 distributors in several countries. As for Europe, in the Netherlands there are as many as 15. Bitcoins are of interest to merchants who are interested in payment security. In addition, related expenses, which depend on the number current operations, are entirely the responsibility of the buyer.

At the beginning of November, the CME Group announced the imminent introduction of futures contracts in Bitcoin. Some believe that their appearance strengthens the legitimacy of Bitcoin, while others see it only as confirmation of the highly speculative nature of the cryptocurrency.

Context

Cryptocurrency will help revive the gold standard system

Le Monde 11/26/2017

Will the “bubble” of raising capital using cryptocurrencies burst?

InoSMI 07/30/2017

Bitcoin is banned in Russia

The Wall Street Journal 01/28/2014

Kazakhstan is eyeing cryptocurrencies

EurasiaNet 09/06/2016 Enterprises, and especially startups, use cryptocurrencies to raise funds. Such operations called ICO (Initial Coin Offering, initial placement coins) rely on the issuance of digital assets (tokens, tokens) that can be exchanged for cryptocurrency during the launch phase of the project. The rarity of tokens gives hope for profit from resale, and therefore investors are always in the forefront. Unlike classic shares, tokens symbolize not a part of the enterprise, but a part of the issued virtual currency. In 2016, ICOs raised 200 million euros. This year, some put the figure at 6 billion, which is more than crowdfunding has raised in ten years.

European Market Surveillance Authority securities(ESMA) considers the growth of ICOs a real threat, especially for ordinary investors. The European Office considers such a system to be unregulated, unstable, non-transparent and unreliable in technically. Its recent press release states that “ICOs are extremely risky and highly speculative investments” and points out “the risk of losing your investment completely.” “Many of these currencies and tokens have no immediate value other than (...) their use to access a service or product,” ESMA continues, demanding (following Swiss and US regulators) tighter controls over cryptocurrencies. A number of countries have recently taken measures to restrict or ban the use of Bitcoin. Thus, China introduced a ban on transactions in bitcoins. South Korea has taken steps to discourage fundraising in exchange for tokens. Algeria is planning to ban all virtual currencies. The French authorities may also propose a legal framework for the use of these currencies. The French financial authority recently warned investors to exercise caution as Bitcoin investment offers surfaced online with incredible returns (up to 500%, some advertisements claim). It is noted that this virtual currency does not have official rate, and that the exchange takes place on the market without any regulation. The extreme volatility of Bitcoin is also rightly pointed out. As for ICOs, they carry “all the risks associated with virtual currencies: loss of capital, volatility, illiquidity, lack of clear and detailed information about the investment, lack of regulation, risk of fraud, risk of project failure or failure.”

Initially, Bitcoin was aimed at distancing itself from traditional financial circles after the global recession of 2008. Its digital and worldwide nature has given it some success, both in the legal sphere and in mafia activities. Bitcoin resembles “tulip mania” rather than a currency standard and may soon lose trust. A 2015 CIA report on the state of the world over 30 years specifically cited the risk that a network like Facebook could issue its own currency. The destabilizing consequences of such a step were considered so dangerous that such emissions were proposed to be banned outright.

— Are there precedents for such a stock market takeoff of an asset that was treated with disdain by so many players? And are there any opposite examples, when assets that caused only ridicule ultimately established themselves on the market?

— Yes, tulip bulbs in 1637. The first speculative crisis of the modern era, “Tulip Mania,” flared up in Holland, which was then famous for trade, freedom of religion and speech, and was able to achieve real prosperity. Her economic growth was largely associated with maritime companies(Dutch East India Company and Dutch West India Company), which covered the territory from America to western Africa and India. As a result of trade exchanges, tulips grown in the Ottoman Empire ended up in Holland. The Dutch were simply crazy about this flower, especially varieties with tiger-colored petals. They were the most difficult to raise because they had to be infected with the virus first. The tulips were grown for almost ten months: planting took place in the fall and harvesting took place from June to September. Tulip lovers purchased them in advance, for example, in July of one year for June of the next. These contracts resulted in new financial products. Thus, a Dutchman bought an onion for 100 guilders in July, knowing that he could resell it for 200 a year later. In addition, it was possible to purchase part of the onion, just like part of the promotion today. Manufacturers quickly raised prices amid growing demand. The already mentioned enrichment schemes only contributed to the rise in prices. The arrival of gold from Indian companies led to inflation, which made it difficult to estimate the value of things. Over the course of several years, the price of an onion has increased more than 30 times. In 1635, 40 bulbs fetched 100,000 guilders (about 25,000 euros today). The growth of options led to the fact that the number of orders many times exceeded real demand, especially since the rise in prices limited the number of potential buyers. Many bought tulips at exorbitant prices without being able to resell them, which bankrupted them.

The speculative frenzy has given rise to many other crises. Railways, the Panama Canal, land, real estate and, of course, the Internet in 2000 all created the basis for speculative bubbles.

At the same time, it happens that the sources of these bubbles create conditions for normal business a few years after the collapse, but there are far fewer such examples than scandals.

InoSMI materials contain assessments exclusively from foreign media and do not reflect the position of the InoSMI editorial staff.

As it became known, MT Gox trustee Nobuaki Kobayashi sold 35,000 Bitcoins and Bitcoin Cash between December 2017 and February 2018.

Analysis of blockchain data shows a correlation of Bitcoin with the timing of sales by the trustee of a certain amount of funds from a bankrupt exchange, followed by a further drop in price. MT Gox's Bitcoin addresses are well known as detectives have spent months analyzing and studying the blockchain.

According to one analysis, 18,000 Bitcoins managed by the trustee were sold after December 18, when the price per 1 BTC was more than $19,000. Sales are shown on the chart for this period

Then, after waiting a bit for the market to recover, the next sale of another 8,000 BTC took place on January 7th. The market is falling again.

Since the cessation of sales, the price of Bitcoin has begun to recover and has almost doubled.

The fourth case of Bitcoin price collapse

According to analysts, the sale by trustees of all these funds on the exchange, instead of using an over-the-counter transaction, provoked a collapse in the price of Bitcoin by 75%.

Of course, the price crash could have been caused by other reasons, but it should be noted that Ethereum did not show significant fluctuations for almost the entire period and even reached an all-time high in January until market sentiment changed.

Thus, the Bitcoin sell-off appears to have had a specific impact on the entire cryptocurrency market, as the half-billion sale put significant pressure on the price.

It seems that this is the fourth time that the MT Gox exchange is to blame for the collapse of Bitcoin. The first collapse occurred in 2011, when MT Gox was hacked and about half a million Bitcoins were stolen.

Then in March 2013 when there was a DDoS attack, and in February 2014 when it declared bankruptcy.

The most recent crash occurred in 2017-18, following an extraordinary decision by a trustee to sell 35,000 Bitcoin and Bitcoin Cash.

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Bitcoin collapse included in Saxo Bank's list of "shocking forecasts" for 2018

Saxo Bank experts have published a traditional list of provocative and shocking predictions for 2018, including, among other things, the collapse of Bitcoin.

In 2018 world economy a wave of shocks awaits, which may include the weakening of the independence and control of the American and Japanese central banks, the collapse stock index S&P 500, political tensions in the European Union and loss of investor interest in Bitcoin.

Saxo Bank's forecast is a list of expected events whose actual probability should be considered to be 10% or higher.

“We believe that the suspiciously low volatility of 2017 will not be repeated. The economy and stock exchanges seemed to be storing up energy for the shocks of 2018. Therefore, some of our forecasts directly point to the threat that the accumulated excessive financial “complacency” will lead to the “volatility bubble” exploding,” the document says.

One of the main events of the next year, according to Saxo Bank, will be the weakening of the independence of the US Federal Reserve System (FRS).

“Historically, the degree of independence of the US Federal Reserve has been determined by the needs and policies of federal government. It is expected to weaken significantly in 2018, as Washington plans to limit government revenues in the face of the threat of a market collapse debt obligations“, experts suggest.

The situation will be exacerbated by the lack of fiscal discipline and the huge budget deficit resulting from the Republican tax cuts, which will only worsen as the US enters a recession.

Bitcoin crash

As Saxo Bank predicts, the policies of Russia and China regarding cryptocurrencies will ultimately lead to the collapse of Bitcoin, although significant growth will await it before that.

“Throughout most of 2018, the Bitcoin price will continue to rise, and grow rapidly, but Russia and China will ultimately cause its collapse through their actions,” analysts say.

Saxo Bank predicts that at some point in 2018 the price of Bitcoin will exceed $60,000, and the market capitalization of the first cryptocurrency will be more than $1 trillion.

“However, very soon the phenomenon called “bitcoin” will have the ground pulled out from under its feet: Russia and China are quickly leaving the game and even banning unauthorized cryptocurrencies. Russia becomes an official player in the cryptocurrency field to influence the development of protocols, and shifts the focus away from Bitcoin in order to retain Russian capital in the country. China is acting similarly,” the forecast says.

As a result, according to experts, by the beginning of 2019, Bitcoin is expected to plummet to $1,000.

Nefteyuan, the fall of the S&P 500 and “domestic” quarrels in the EU

Also included in Saxo Bank's list of shocking predictions is the start of oil contracts in Chinese yuan on the Shanghai International Energy Exchange, a move that will have huge geopolitical and financial consequences.

A fall in the S&P 500 index is also predicted, akin to the collapse of 1987, and it will be associated with a reduction in the balance sheet of the US Federal Reserve and the volume of purchases of ECB assets from January 1.

Saxo Bank believes that 2018 will see increased diplomatic tension between Western and Eastern Europe due to expat issues, migrant quotas and democratic values, while next year we will witness an unexpected renaissance in South Africa that will lead to political and economic prosperity for the region.

Another prediction concerns women in business: according to Saxo Bank, they will rapidly seize power in corporations. Already, women often have more high education, and if today representatives of the fair sex dominate 32 companies from the Fortune 500 list, in 2018 there will be twice as many such corporations.

“We can say with confidence that if any of our predictions come true in 2018, the world will find itself in a completely new situation,” the forecast notes.

Let us remind you that exactly a year ago, Saxo Bank added to the list of “provocative forecasts” for 2017. However, even then, experts believed that the cryptocurrency would rise in price to a maximum of $2,100.

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MOSCOW, December 23 – RIA Novosti, Natalya Dembinskaya. The most expensive and popular cryptocurrency in the world, Bitcoin, with a capitalization of $232 billion, has entered a steep peak. Having reached the $20,000 mark, Bitcoin lost 45 percent of its value in five days—and continues to fall. What are the reasons for such a powerful collapse, who are the “whales” who captured the market, like “hamsters” who bought coins “at highs”, succumbed to panic and what future awaits cryptocurrency - in the RIA Novosti material.

Record growth

At the auction on December 17, the Bitcoin rate exceeded the $20,000 mark, and its capitalization reached $335 billion. Even the most optimistic analysts did not expect such pressure from the market leader - it was assumed that by the end of the year a maximum of 10 thousand dollars would be given for this currency.

However, the cryptocurrency was unable to maintain its new height and immediately began to slide down. According to CoinMarketCap, on Friday Bitcoin was trading at $11.8 thousand: minus 28 percent of its value in the last 24 hours alone.

Bitcoin futures trading began last week; according to market participants, they started quite successfully. Chicago-based exchange Cboe Global Markets even experienced an overload of traffic on its first day, forcing it to suspend trading twice.

Experts, however, warned: as long as speculators have confidence and their sentiments are positive, prices will rise. However, the slightest change in sentiment is fraught with a fall.

During 2012-2017, the cryptocurrency grew by 141,500 percent, and the capitalization became comparable to the value of General Electric.

"Whales" recorded profits

“Such rates of growth of the asset, supported mainly by rush demand, should alarm investors,” said Oleg Safonov, managing director of BCS Ultima.

And investors seem to have become wary, or rather, hastened to take profits. This is what caused a sharp decline in the price of the world’s most popular cryptocurrency, observers are sure, noting that up to 90 percent of all cryptocurrency is concentrated in the hands of a narrow circle of people.

“The main reason for the collapse is that large investors - whales - take profits and exit Bitcoin,” said Vadim Valeev, general manager platforms CryptInvest.biz.

Who are "whales"? These are, for example, large funds or individuals - owners of large volumes of Bitcoin. There are about a thousand of them in total and they own up to 40 percent of the entire digital asset market, which they successfully manipulate. Considering that just since the beginning of the year, Bitcoin has risen in price 15 times, having sold even a small share of its huge fortune, they can sharply collapse the rate.

As the Bitcoin rate grows (and most observers expect a rebound of this cryptocurrency after New Year's holidays) "whales" have more and more opportunities for price maneuvers related to the sale large quantity these coins.

"Hamsters" lost money

For whales, a collapse is a controlled event. As analysts note, this is a normal reaction at the end of the year. Having serious funds - tens and hundreds of millions of dollars - major players“pump” the course when they need it, and to the required levels. When demand begins to go off scale, they begin to exit the cryptocurrency. In the end, the victims are the “hamsters”—small and inexperienced investors who bought Bitcoin at “high prices” (high prices). They react to any panic and, not being owners big money, suffer the most serious losses.

Panic-stricken “hamsters” immediately sell the currency due to corrections and negative news. Alarmists, on the contrary, play into the hands of the “whales”: professional slang Traders call this a “haircut.” When the “hamsters” rush to dump digital assets, the heavyweights pick them up “at the bottom”, and then again heat up the rate: they launch positive news and again sell at peak values.

“Those who bought bitcoins on highs are now in a panic: they did not expect such a collapse,” states Valeev.

Such investors end up out of business. All that remains for them is to gradually drop out of the game, because they have less and less funds for trading.

The greatest losses were suffered by investors who bet exclusively on bitcoins. Those who diversified their portfolio were luckier: for example, in addition to bitcoins, they also had “blue chips” of the cryptocurrency market, which have some assets, companies and technologies under them, for example, Ripple and Etherium.

The collapse is not over

As observers assure, the current collapse was predicted: it was expected by December 25, since “whales” usually become more active before the New Year. However, it happened a little earlier.

Thus, the depth of the cryptocurrency’s fall has not yet been exhausted; it will continue to fall, and to what levels is difficult to predict. “It is possible that it will fall to the support levels of ten and nine thousand dollars, but it is possible that it will fall lower,” Valeev suggests.

Investment director at the CryptoLife fund, Mansur Huseynov, believes that Bitcoin could fall in price to $7.5 thousand. He notes that growth has been too fast in the past few months and the market needs a correction.

However, according to observers, already in January-February the situation will stabilize and the Bitcoin rate will go up again. Traders do not exclude that by spring they will give 25 thousand, and even 40 thousand dollars per coin.

Be that as it may, the powerful collapse of the cryptocurrency once again confirms its speculative nature - it is close to the nature of a real estate bubble. How long-term and dramatic the fall will be and whether there will be a rebound will be seen in the coming month.