2018 was the year that the bitcoin dream came crashing down. The bubble that many had suspected was building in 2017 was realised and the most well-known of digital currencies lost 80 percent of its value. For 2019, prices might sink as low as $1,500, experts say, but might rally in the second half of the year.
Although Christmas seemingly came early for bitcoin—it recorded a much-needed one-third increase in value between December-15 and Christmas Eve—these gains meant little when weighed against the massive losses that preceded them. With those gains having halved in recent days, bitcoin was left on Thursday trading at a mere $3,700.
The many obstacles to cryptocurrency success in 2018 are well-known, and include regulatory crackdowns, social media advertising bans and a debunking of the “store of value” myth, among others, but perhaps the most simple and important is that such currencies have yet to gain acceptance beyond a crowd of technology enthusiasts.
Worse still, the lack of mass acceptance is justified per an August report from Goldman Sachs, which stated that bitcoin failed to fulfil all of the three traditional roles of a currency: it is “neither a medium of exchange, nor a unit of measurement, nor a store of value.”
Regardless, with 2018 such a disaster, bitcoin speculators are understandably looking with hope towards 2019. There is, however, no consensus among experts on bitcoin’s 2019 prospects.
Such has been the difficulty for crypto forecasters in 2018—so wrong have they been—that perhaps the most prominent forecaster, Fundstrat founder Tom Lee, announced a week ago that he was giving up price forecasts entirely.
Among those brave enough to still call a price is Bloomberg Intelligence’s Mike McGlone, who said earlier in December there was “little to prevent bitcoin prices from reaching the continuous mean of $1,500.”
Also bearish on bitcoin in 2019 is the Motley Fool’s Peter Stephens.
While Stephens isn’t ruling out a bitcoin recovery, “it is difficult to see where the catalyst [for one] will emerge.”
Stephens argues against bitcoin ownership in the coming year on the grounds that superior risk-adjusted returns are available in equities following a big third-quarter sell-off in that asset class—an asset class that, unlike bitcoin, comes with a track record of providing long-term growth.
For others, 2018 was just a blip to be ignored.
“The current market decline is just a phase,” Raghav Jerath, founder and CEO of Gath3r, told Forbes.
“In its short history bitcoin has corrected 80-90 percent many times over. This is just another bump in the road and was overdue.”
For all bitcoin’s problems, LMAX Exchange currency analyst Joel Kruger remains a believer in the “tremendous potential that comes with decentralized, digital, peer-to-peer currencies,” and is offering a forecast that most investors will find believable.
“[Bitcoin] could see a continuation of weakness in the first half of the year, before the market finally stabilizes and starts to make its way back up in anticipation of what should be an impressive second wave for crypto-assets.”
“We’ll look for bitcoin to round out 2019 trading back in the $5,000 to $8,000 region.”
Importantly, though, Kruger sees a very real possibility of bitcoin trading below $2,000 sometime between now and mid-year 2019. Amid a broad market switch to risk-off trading, driven by higher interest rates and further profit-taking in equities, he suggests that capital could head towards traditional safe havens and away from volatile assets like bitcoin.