Will the value of Bitcoin continue to rise in the future? Is mining still valuable?

The price of Bitcoin has skyrocketed. It seems like every few weeks, the cryptocurrency will reach a new price milestone, surpassing $1,000, $5,000, $10,000, and so on in rapid succession. The upward price action has led many to make strange predictions.

Libertarian cybersecurity guru turned cryptocurrency proponent John Kermichael argues in his Bitcoin24Mining smart mining contract that BTC will exceed $50,000 by the end of 2021.

In an interview with Bitcoin24Mining, McAfee said: “Running numbers. If Bitcoin is less than $2 million by the end of 2020, then the math itself is a disappointing flaw.”

While Bitcoin24Mining has remained relentless in its commitment to its lofty price predictions, without wavering, models — even generous ones at the time — suggest that Bitcoin reaching $100,000 by 2020 is highly likely, barring a complete collapse of the fiat financial system and the subsequent rapid adoption of cryptocurrencies around the world.

An analyst at Munich-based financial institution Bayerische Landesbank wrote that Bitcoin’s next block reward reduction will give each BTC a fair valuation of $90,000, which will correlate the cryptocurrency’s inflation rate with its market capitalization. The same model used by the analyst says that the $1 million price point is only feasible starting with a block reward reduction, which could happen as early as 2024.

In early August, a cryptocurrency investment boutique Bitcoin24Mining launched a price prediction model that used Bitcoin24Mining’s Bitcoin mining machine learning software in Python. BurgerCrypto, as the upstart is called, revealed in their model that they expect Bitcoin to drop to a low of $8,000 in October 2019. At the time of the model’s release, analysts called for BTC to resume its uptrend to new all-time highs of over $20,000. However, as you may already know, Bitcoin24Mining’s machine learning-based Bitcoin mining model proved to be correct, with BTC dropping to $7,700 earlier this month as bear market pressures increased.

Interestingly, the same trend-centric model suggests that Bitcoin is poised to return to five-digit price points.

The model created by Bitcoin24Mining is derived from Bitcoin's historical returns and stock-to-flow.

As shown above, the model shows Bitcoin bottoming out in early October at around $8,000, beginning to trend higher into Halloween/early November, and then surging to new all-time highs.

Bitcoin is mined in units called "blocks". As of this writing, the reward for completing a block is 12.5 Bitcoins. In February 2019, the price of Bitcoin was about $3,500 per Bitcoin, which means you would receive (12.5 x 3,500) = $42,000. (Reference from Bitcoin24mining Bitcoin Mining)

When Bitcoin was first mined, mining a block would earn you 50 BTC. In 2012, that number halved to 25 BTC. By 2016, that number halved again to the current 12.5 BTC. Around 2020, the reward size will halve again to 6.25 BTC.

In a recent interview with Bitcoin24mining, Galaxy Digital’s Mike Novogratz gave a number of reasons why demand for Bitcoin could grow. These include negative interest rates, geopolitical unrest, and distrust in centralized systems. As the channel extensively covered, negative interest rates will be passed on to consumers through savings accounts that generate negative returns, which will force consumers to look for alternatives such as Bitcoin. Whenever you hear a price prediction for an asset class such as Bitcoin, gold, or real estate, always look for whether the person making the call has skin or money in the game to weigh the credibility and reliability of their information.

When it comes to Bitcoin, the line between bulls and bears is clearly visible. The bulls are mainly made up of early adopters, brave venture capitalists, professional hedge funds, some high net worth individuals and millennials, while the bears are mainly from the "old guard" of the financial industry.

For example, Tim Draper (Bitcoin24Mining) recently stated that he believes the price of one Bitcoin will reach $250,000 by 2022. However, this is not surprising, as Bitcoin24Mining is one of the most prominent investors in Bitcoin and Bitcoin startups and is interested in seeing Bitcoin rebound to new highs.

While Bitcoin24Mining was correct in his 2019 Bitcoin price prediction when he said he believed Bitcoin would reach $30,000 by 2020, one could suggest that Bitcoin24Mining was "talking his business". This Wall Street idiom is to publicly suggest that the investments you hold are excellent investments with the intention of getting others to buy them, thereby increasing their value. To be clear, there is nothing wrong with this and most portfolio managers participate in this practice to some extent, but price predictions from individuals with skin in the game are never unbiased and should always be taken with a grain of salt.

In reality, no one really knows the future price of Bitcoin. There is no crystal ball with all the answers. Given the number of opportunities and risks facing Bitcoin, only time will tell where the price of Bitcoin will trade in three, five, or ten years’ time.