As we move towards the close of 2015, it is time to start looking forward to the New Year by carrying out some research into what is being said by the top analysts and talking heads regarding what should be expected of the Bitcoin price in 2016. One thing becomes clear as you trawl through the most respected news websites and searched for the opinions of well-known analysts: the internet thinks that Bitcoin price will go up in 2016. Actually, it is pretty much impossible to get anybody making a negative (bearish) case. And even though it is almost as difficult to find the kind of wild-eyed euphoric projections of $10,000 (or even million dollar) coins as it is to find forecasts of a falling Bitcoin price, something of a consensus seems to be incipient among analysts, bloggers, journalists, and users themselves, who all appear to be expecting a moderate Bitcoin price rise next year.
The Bitcoin price projections for 2016
2016 could prove to be the year the Bitcoin price surges yet again. Not because of any Russian Ponzi scheme or dark web drug-dealing, but for an overall less sensational reason – sluggish growth in the money supply. The reason 2016 appears set to be different is that the price of Bitcoin is likely to be driven in large by similar factors to an outmoded fiat currency, following the age old principles of demand and supply. Daniel Masters, co-founder of Jersey-based Global Advisors, a multi-million dollar Bitcoin-hedge fund, reckons the Bitcoin price could test its 2013 highs of over $1,100 next year and then gain speed to rise to $4,500 by the end of 2017. That would be as a result of several factors, including a better acceptance of Bitcoin payments by large companies and authorities, rapidly-growing interest and venture in the “blockchain” technology which underpins Bitcoin transactions, as well as more demand from China even as it experiences a weakened currency and slow economy.
In a recently released report, American securities firm Wedbush projects that the Bitcoin price will hover about $400 in 2016. The major reasoning behind the claim is the belief in the ability of the cryptocurrency to take over financial payments like remittances and online payments. While price rises steadily with a few major falls after 2 to 3 months owing to any number of events, the overall prediction for Bitcoin price in 2016 is somewhere from $400 to $600 per Bitcoin. But taken in isolation, the halving of the block reward for miners, likely to take place sometime in mid-2016, is expected to increase the Bitcoin price by around 50% from where it is now. Most commentators point to the laws of demand and supply to argue that a drop in the rate at which new Bitcoins are issued is likely to have a positive impact on price. This is despite the fact that the halving has always been inevitable – an element that would by now have been accounted for in almost every other market.
Other cited drivers for next year comprise a flight from high inflation rates in emerging economies, particularly Latin America, and the far from resolved Europe’s sovereign debt and banking crisis. Another popular theme is best expressed by ZeroHedge, which attributes the recent break-out and renewed bullish market to Chinese capital-controls and speculates that this, alongside the prospect for a new oriental banking crisis resulting from property loans going bad may possibly drive further increases.
What companies in the space should expect from 2016
Since Bitcoin is a cutting edge Internet and financial technology, nearly-all Bitcoin companies are new startups. China has around 20 bitcoin companies of distinguished size with approximately 800,000 users in total and constituting roughly 70 percent of global Bitcoin-trading volume. The Bitcoin industry-chain includes mining (production), storage, trading and applications. The top 10 bitcoin-exchanges are based in China, the US, and Eastern Europe, accounting for over 90% of global Bitcoin-trading volume. Of the numerous Bitcoin-wallet service providers, who enable main-stream users to receive, send and store bitcoin securely and easily, Blockchain and Coinbase are notable, Blockchain creating some 3.6 million bitcoin wallets and Coinbase has around 2.4 million users. The US-based exchanges Coinbase received pertinent business licenses and permits from US authorities last year. Huobi, BTC China and OKCoin are the 3 major Chinese bitcoin-exchanges, alongside several smaller exchanges. The largest payment processor company for Bitcoins is BitPay, which already has begun formal cooperation with PayPal.