BBA's 3rd Annual New Year Bitcoin Predictions
Dec 5, 2016 --- (ARCHIVED) BBA Articles
Following two years of torment for bitcoiners that brought a bear market in terms of both price and sentiment, 2016 has turned out to be a good one indeed. Perhaps not one for the record books, but we think this year will be looked back upon with envy by history as it evolved into one of the most stable and encouraging in bitcoin's short history, at least from a technical perspective.
We think 2017 will be more interesting from a fundamental perspective than 2016 has been, although with that always comes trading opportunities. We look forward to watching these irrelevant yet fun predictions materialize (or not), and we hope you will continue to join us on this journey known as cryptocurrency.
BBA's 2016 Predictions Review: You can view last year's article here, which was published on December 21, 2015. Let's see how we did:
1.) "We think the price of 1 bitcoin will get above 1175 $ USD (Finex) at some point in the year 2016." - While we cannot currently be sure whether or not this will in fact be true on December 31st, 2016 at 11:59pm, so far we have been wrong. Despite having a good year in terms of gains, the price of one bitcoin has so far failed to breakout to a new ATH, even for a second. We are hopeful that this can be achieved in the next three weekns, but are not expecting it.
2.) "Wall Street and Silicon Valley will continue to experiment with “blockchain technology” as they try to understand the innovation... most will realize that the best way to use blockchain is via bitcoin." - This one we feel comfortable claiming victory on. The recent announcements of funding shortfalls and consortium dropouts at R3CEV, as well as the failure of any major blockchain initiative to gain any sort of noticeable traction is an expected and welcome outcome of the distrubuted ledge fad. We are glad to see it go, and are happy that the lesson has been learned.
3.) "We get at least a near term resolution to the blocksize controversy in the form of a very conservative increase in MB size, with very conservative scaling." - This one is partially fulfilled, sort of. With the rollout of SegWit code in Core 0.13.1, we technically do have the potential for a very conservative increase in MB size, with very conservative scaling thereafter, however it's all academic until the bitcoin stakeholders adopt the soft fork via 95% concensus. If this fails to materialize then bitcoin will remain as is, but if we can get these scaling meseaures deployed then bitcoin can increase capacity dramatically via a number of channels (lightning, etc).
4.) "Privacy focused altcoins will begin to garner more attention due to the recently passed CISA act, the realization that bitcoin is anything but private, and the growing need for a truly fungible, global currency." - Again, we are claiming victory on this one, big time. While we have had our eye on this space since 2014, the realization that there is a need for a truly anonymous alternative to bitcoin hit the mainstream of cryptocurrency thinking late in 2016. ZCash (ZEC) certainly got everyone's attention with an astronomical initial valuation, however the bigger news in our opinion was the adoption of Monero (XMR) by several darknet markets.
Overall, we think we did well enough to get a passing grade, but not nearly well enough for an A+. Next year, however, we hope to get a perfect score so we can once again be the teacher's pet...
BBA's Bitcoin Predictions for 2017:
Prediction #1 - We hate to sound like a broken record, but indeed we would be remiss if we didn't make our #1 prediction for 2017 another call for all time highs. Having said that, we think there is now a much better chance of a sustainable move above and beyond $1000 USD than there was at this time last year, mainly due to a beautiful looking weekly chart that has been simmering for the past 36 months.
We realize it is a fool's errand to try to predict what prices will do in a parabolic enviroment, but if history is any guide we could easily see a peak in the 2500 - 3500 $ area prior to yet another multi-year consolidation and digestion period. We have little doubt that 2017 will be a much more volatile year both to the upside and the downside than the past three calendar years have been (2014 - 2016), due not only to the statistics but also to the global macroeconomic environment. Whatever price does, we are sure there will be some tradable fireworks.
Prediction #2 - This prediction is thematically inline with many others that we have made over the past few years. Given Wall Street and Sillicon Valley's newfound reticence regarding blockchain technology sans bitcoin, we think those firms will slowly but surely move capital into the biggest and most secure chain on the planet in order to invest in and deploy technology on top of it, which should cause a substantial boost in near term demand.
Not only that, but we suspect governments around the world will continue to flirt with the idea of banning cash which will drive the underground economy from paper to digits as the underserved find alternatives to the draconian fiat system. Finally, speculators who previously passed on buying bitcoin on dips have now seen the consequences of such a strategy many times over now and are much less likely to make the same mistake again in our opinion. This should keep a steady bid in the market once price crosses sustainably above the $1000 level yet again.
Prediction #3 - Our final prediction for 2017 is that Segregated Witness gets adopted in Q2 based on compromises between Core and Unlimited. We think this entails something like a promise (in writing) by Core to boost blocksize by some number once we know the full effects of SegWit, as well as a moratorium on calling for an unlimited blocksize for a number of years until we get a better idea of how the economics are developing in regards to incentives and decentralization. Both of these should be a good thing for the ecosystem, as will the deployment of payment networks and sidechain experiments, and should reunite the community just as price is hitting new highs (generally speaking).
The recent divides have made clear that bitcoin is no longer a community united on all fronts, although it has also highlighted the need for a strong front on what are obviously the important issues (censorship-resistance, decentralization, fungibility). If rational minds can come together for the good of bitcoin, the better for us all. If not, bitcoin will continue to be bitcoin, but we will all be just a little bit disappointed when thinking about what could have been.
We thank you dearly for taking the time to read our thoughts going into what is sure to be a very interesting year for the cryptocurrency space. We look forward to watching how this all plays out with everyone over the next twelve months.
@AKWAnalytics & @S3052