



Where is Bitcoin’s price headed? That’s a question that many investors want the answer to, and there’s never been a shortage of pundits and personalities to offer suggestions. But are the Bitcoin price predictions of industry insiders actually any good?





A while back we took a look at some predictions for 2015 made in 2014, and found that virtually everyone had been wildly optimistic (and completely wrong) about Bitcoin’s price. Now that it’s 2020, we tried something similar, looking back through media reports for predictions about Bitcoin’s price at the end of 2019 or “by 2020.”





We got a similar result. Almost everyone was wrong, and most people were overly optimistic.





In the chart below, we’ve laid out the results, including a calculation of the predicted price’s percentage of the true Bitcoin price (based on the real price of around USD $7,050 as of this writing).





We’ve sorted the predictions using a “Wrongness” rating — predictions off by under 2x are “slightly wrong,” predictions off by 2x-3x are “moderately wrong,” predictions off by 3x-10x are “very wrong,” and predictions off by more than 10x (or predictions of a $0 price) are “extremely wrong.”





Blue rows in the chart indicate that the person predicted a price range rather than a single price. Where this is the case, we’ve listed whichever end of their range was closer to Bitcoin’s real price as their price prediction. One range, Joel Kruger’s, includes Bitcoin’s true price, so we’ve given him full credit for being correct.









Because it’s limited to predictions of Bitcoin’s price “by 2020” or at the end of 2019, this chart doesn’t include some of the wilder predictions for 2020, like John McAfee’s infamous promise that he’ll consume his own genitals on national television if Bitcoin doesn’t hit $1 million in 2020.





There are a few lessons to be learned from this data.





First, a significant majority of predictions about Bitcoin’s price are likely to be wrong, even over relatively short timescales like a year. Mathematical models appear just as likely to be wrong as industry insiders. In other words, nobody really knows where Bitcoin’s price is headed.





Second, perhaps unsurprisingly, some of the worst predictions come from partisans. Calvin Ayre’s $0 BTC price prediction, for example, certainly appears self-serving given that he’s a founder of Bitcoin Cash, a Bitcoin rival.





Third, people who predict Bitcoin’s price tend to err on the high side. That may just be due to the fact that 2019 was a relatively disappointing year for Bitcoin, or the fact that the people who get asked about Bitcoin prices tend to be Bitcoin enthusiasts. But it’s worth pointing out that the science suggests most people — about 80%, according to this paper — display “optimism bias,” a tendency to make overly positive and ultimately inaccurate predictions about the future.





That’s not a bad thing, since science shows that optimists also tend to be healthier and live longer, among other advantages. Our general bias towards unrealistic optimism is probably an evolutionary advantage overall, but it does mean that we may want to be particularly cautious about basing investments on predictions.





And when it comes to an asset as volatile as Bitcoin, trying to make predictions might be pointless, anyway. That’s the conclusion Fundstrat Global Partners came to a few months after making the predictions we rated in the chart above. The company told clients in December 2018 that it would stop predicting Bitcoin prices with timelines due to “the inherent volatility in crypto.”



