Bitcoin Price Prediction 2020 | Why The Boom Matters?

Business is booming in Bitcoin right now. Here’s why it's important.




Katharine Wooller
MD, Dacxi UK & Europe


20 December, 2020 | 4 MIN

Last week’s welcome news that  Bitcoin hit a record price surging past the $20,000 mark was a considerable milestone The ‘why, how, and what happens next,’ is an equally intriguing conundrum.  Since the previous high, in 2017, crypto fans have been eagerly awaiting a much-hyped bull run.

It is important to acknowledge the previous high was hardly a bed of roses for the early investors; whilst 2017 saw bitcoin go from $804 to $19,497 – only to then fall back to $3,242 – nail-biting stuff for even the most hardened investor, with some individual weeks seeing swings of between 30 and 50%.  To surpass the previous high, therefore, has been seen as a ’coming of age’, and firmly putting to bed the “roller coaster” years.  More importantly, the crypto investors, who have been patiently waiting for halcyon days, see it as the beginning of a rampaging bull run.

Where prices go next, and how fast, is a subject of much dispute.  Until recently the predictions have varied wildly and unfortunately come only from those deep in trenches of crypto, who suffer, at best, from a vested interest, and at worst from some serious confirmation bias.  When I read some of the crypto industry press suggesting that bitcoin will reach $1mUSD I roll my eyes – you might as well get a toddler to generate a random number.

More recently, there has been some more considered projections, from the traditional banking world.  A recent report, from Citibank to its institutional clients, put their flag firmly in the ground with a price prediction of $318,000USD by 2021.  Interestingly, their analysis was via comparison to the gold market of the 1970s.  Wall Street firm, BTIG, is even more positive, claiming that bitcoin should reach $50,000 by the end of next year.

There is much about the current bull market which is markedly different from the previous attempt.  Firstly, there is the potent combination of institutional interest and a huge amount of excess liquidity in the system.

Crypto is, therefore, no longer a niche of an underground subsect of a small number of individuals!  Recent votes of confidence for crypto include analysts at the $631bn investment firm Alliance Bernstein “I have changed my mind about bitcoin”, and Chief Investment Officer of Blackrock, with $8tr under management, declaring bitcoin a “durable mechanism”.  The power of this good news, and the buying power this creates, cannot be underestimated: Paypal and Greyscale are currently purchasing more bitcoin than is being created.

The data is persuasive; Delphi Digital highlights that bitcoin’s monthly relative strength index (RSI), a momentum indicator, is about to enter territory not seen since the end of 2016.  Crypto OTC desks are clocking in record volumes.

The retail investor exchanges of choice have seen an uptick. Combined daily volumes for Coinbase, Bitstamp, Kraken, Gemini, and ItBit have been $1.5bn, a substantial increase on the typical $488m average.   For many traders, however, $20,000 is the next barrier that needs to be broken, and it is likely that this is predominately psychological – it would make sense once we surpass this some serious gains are to be found.

A lot of the analysis, in my opinion, does not give bitcoin, and the other healthy blue-chip coins Ethereum and Litecoin enough credit.  Over 2020, they have some of the best-performing assets on the face of the planet, growing 159%, 353%, and 90% respectively.  Not bad for an asset class still at primary school!

I’d expect to see some pullback, potentially of up to 15% – historically there has been a correction.  However, we’ve always seen higher highs , and in my opinion, the future is bright for crypto in 2021.



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