Bitcoin Investor Predictions 2020
Bitcoin is and always has been the lead dog in all of cryptocurrency, a status it has had a stranglehold on since it became the first established cryptocurrency in 2009. Much has happened in the 11 years since Bitcoin became an investment vehicle for the forward-looking, tech-savvy, and shrewd— most notably, the value of Bitcoin has skyrocketed.
As of this writing, the price of Bitcoin is $18.549. This price reflects a multi-thousand-dollar climb in value in just a matter of months during 2020. So what’s with the renewed bullishness on Bitcoin?
The pandemic and the economic uncertainty that it has bred is the most obvious factor in Bitcoin’s new upward price trend. Will it surpass $19,338 this time? One widely-held perception is that Bitcoin, and crypto more generally, exists largely outside of traditional financial systems.
Should legacy economic systems collapse or experience shocks, Bitcoin is seen as a hedge against loss of personal wealth.
Beyond benefitting from current and prospective economic events, Bitcoin and the blockchain technology that gives life to cryptocurrencies is gaining mainstream traction. Its potential applications range from election security (more relevant than ever to Americans) to healthcare and recreational use cases like entertainment. And, of course, there is a host of finance-related blockchain projects collectively known as decentralized finance (DeFi).
As more people come to understand the general benefits of blockchain, they may be increasingly likely to invest in the technology through Bitcoin.
In order to gain clarity on how the investor class feels about the future of Bitcoin, we reached out to them with a survey. We aimed to get inside of their heads by asking how heavily-invested they are in Bitcoin, why they are invested in Bitcoin, and where they believe their investments will (or won’t) ultimately take them.
These 1,000 respondents had some interesting things to say about the future of Bitcoin, which may reflect the broader future of cryptocurrency and the global economy.
Bitcoin Investor Survey
As history has shown, there is no force more powerful than the investor’s psyche to determine how markets will move. The market for Bitcoin is not an exception, as investment in cryptocurrency in general and in Bitcoin specifically will ultimately determine where its price lies. It’s no accident that we homed in on investors’ motivations and psyche pertaining to Bitcoin.
The findings of our survey could be a crystal ball not only for the future of Bitcoin, but alternative investment vehicles like gold, stocks, dollars, and real estate as well.
Noteworthy conclusions from our survey include:
- 17% believe Bitcoin will be worth more than $50k by 2030
- 65% of Bitcoin investors remain bullish
- 24% keep 1-10% of their savings in Bitcoin
- More than half of investors believe that Bitcoin is a sounder investment vehicle than the U.S. dollar, stocks, gold, and real estate
It is important to note that these are Bitcoin investors. By the very fact that they are invested in Bitcoin, they are bullish, at least to some extent. Yet, as the price of Bitcoin continues to trend upwards, bullishness has become increasingly synonymous with reality.
By picking the minds of those who are helping fuel the Bitcoin price resurgence, we may better understand why Bitcoin is viewed as a viable store of value (particularly in hectic times), and whether the upward trend is likely to continue.
Survey Analysis Part 1:
Bitcoin Investor Snapshot
The term “typical” is a tricky one. To sum up any group of individuals or circumstances into one “typical” archetype generally leaves room for misrepresentation, and can be an overly simple way of conveying a point or reaching a conclusion.
We did not want our survey to reflect the “typical” Bitcoin investor. We wanted to understand more precisely who our respondents were, and how deep into Bitcoin they are (or aren’t). Therefore, one of the questions that we asked respondents to answer was “How much of your savings is in Bitcoin (or other cryptocurrency)?”.
Understanding the share of respondents with relatively large or small stakes in cryptocurrency may be revealing in multiple ways. For one, someone who invests a significant segment of their portfolio in Bitcoin is issuing the ultimate endorsement of crypto: They’re all in, and their large stake speaks for itself.
While these highly-leveraged crypto investors may wholeheartedly believe in the loftiest projections for Bitcoin’s value, you may also understand that they represent the extreme of positivity for crypto.
On the other end of the spectrum, those who have little to no investment in Bitcoin or other cryptocurrency may be completely convinced that Bitcoin’s real or perceived weaknesses will prove fatal. Their opinions on Bitcoin’s future may also be considered within this context of doubt.
Naturally, there is a significant segment of investors who understand that Bitcoin offers great promise, but like any investment, is not a sure thing. Aside from the boxing bout where one fighter has pledged to take a dive, finding a sure-thing to invest in is an impossibility for most.
The investors who we surveyed were a mix of the all-in, the all-out, and the partially-leveraged.
Percentage of Savings Invested in Bitcoin or Other Cryptocurrency
Examining where investors are placing their savings is one of the clearest ways to gauge belief in any investment vehicle,
whether it is Bitcoin, the stock market, gold, or cattle futures. There is an element of gambling in any investment, but investors are generally less risk-averse with their savings than, say, the dollars they allot to buying scratch-off tickets.
It is also relevant to note that a significant portion of retirement-age investors lost 20% (or more) of their savings in 2008. Those burned once are generally far more wary of touching the stove again, and the still-fresh burns of 2008 may affect the way that investors approach cryptocurrency.
Make no mistake, the price fluctuations native to Bitcoin and other crypto constitute a risk. Yet those fluctuations also represent a potentially massive payoff for those heavily invested.
Most Bitcoin Investment Is Modest
Diversification is generally the name of the game when it comes to investing, or any type of savings.
It appears that, for most Bitcoin and crypto investors, their stake in digital currency is just one slice of their pie of savings.
More than half of investors surveyed (51.9%) have invested 20% or less of their savings in Bitcoin or another form of cryptocurrency. The largest segment of any respondent category (16.3%) explained that they had invested less than 1% of their savings in crypto. 15.8% of respondents (the second-largest contingent of surveyed investors) have between 1% and 5% of their portfolio in cryptocurrency.
Depending on the size of the investor’s portfolio, these stakes could represent massive sums. Still, it is clear that the majority of investors in Bitcoin and other cryptocurrencies remain aware of the potential risks—price volatility and hacks among them—that come with crypto investment. Modesty aside, they aren’t willing to completely miss out on the significant gains that crypto can and has provided many investors.
A Small Segment of Investors Are Going Big (Like, All-in)
Risk aversion, schmisk shmaversion. At least, that is the view of 3.5% of respondents who claim to have 100% of their savings in Bitcoin or other cryptocurrencies.
Another 4.5% of respondents have 90% of their savings portfolio in crypto, while 6.3% have staked 80% of their savings in digital currencies. History shows that markets can leave such highly-leveraged investors crying. The question is whether the tears will be joyful or sorrowful. Of course, it is possible that Bitcoin’s price remains relatively stable over time, and these large stakes will not necessarily result in either ruin or riches.
Only time will tell.
Many Investors Remain in the Middle Ground
While most investors we polled have a modest portion of their savings in crypto and others are highly-leveraged, a significant portion of investors reside somewhere in the middle.
Some wise people have said that moderation is the key to success in life, and it seems that just over 22% of respondents live by this mantra. This is the percentage of investors who have sunk between 21% and 60% of their savings into cryptocurrency.
This investor class may believe strongly in the benefits of digital currencies and blockchain technology but may also know that anything can happen in this crazy world. They may understand that putting all of their eggs in a single basket is a risky gamble, and so they exercise restraint while dedicating a substantial portion of their savings towards cryptocurrencies.
Overall, it appears that investors are taking a cautious approach to crypto investment. Most have purchased enough digital currency to ensure that they reap some form of return if prices continue to track upwards, but not so much that they will see their savings vanish—or even significantly decline—if crypto prices take a downturn.
Risk aversion among crypto investors exists on a spectrum. Some are completely averse to crypto, while others show no fear by putting their entire pot of savings in Bitcoin and other digital currencies. Generally speaking, investors appear to fall somewhere in or near the middle.
Survey Analysis Part 2:
Assessing Investors’ Motivations For Belief in Bitcoin
You know how investors are allotting their crypto investments. But why have they invested the way that they have?
This is another question we wanted to answer. Different investors may have different motivations. When it comes to cryptocurrency, there are many possible reasons why someone might take a bullish stance. Possible explanations include:
- They firmly believe that legacy financial systems (the dollar, for example) are in for short- or long-term decline, and see crypto as the most fail-safe alternative
- They believe that blockchain technology is a highly-insulated, secure basis for financial investment
- They do not completely understand what affects crypto prices, but do not want to miss out on the upward trend in crypto’s value
Conversely, there are reasons why one might be skeptical of cryptocurrency’s viability as an investment.
Skepticism may range from complete non-belief in Bitcoin to healthy wariness of developments that could negatively affect one’s crypto stake.
Even considering the security benefits of crypto such as multi-step authentication and decentralization, hacks have happened, with millions in assets stolen in one fell swoop. Crypto’s intangible nature and decentralized ownership framework leave questions about an investor’s recourse if:
- they lose their private keys
- an internet-wide attack or reset was to alter or erase records of crypto ownership (we know the blockchain is a permanent ledger, but still…)
- their crypto assets are stolen through a hack
The downside of crypto being a young technology is a dearth of answers to questions that start: “What happens if….?”
With these possible motivations in mind, we found that:
Most Investors Believe the U.S. Election Will Affect Bitcoin’s Value
Investors may be motivated to move their money to one type of investment or another based on societal tides. Elections may be one societal event that motivates investors to increase or reduce their stake in crypto, depending on their read of possible outcomes.
When all is said and done, the 2020 election could be the most dragged out and economically relevant in American history. When we asked our respondents before the election, we found that the majority of surveyed crypto investors (54.8%) believe that the election will indeed impact the value of Bitcoin in some way over the coming 12 months.
For better or worse, investors are betting that the determination of who will ultimately become president, and how that process unfolds, will lead to a change in the value of Bitcoin and other cryptocurrency. They have historical precedent for believing this.
With its potential for the unprecedented, it may not be fair to compare the potential economic impact of this election to the effect of elections past—we’ll make the comparison anyway.
The results of the 2016 election triggered a surge in Bitcoin value. To date, the announcement of Biden as this year’s winner has not yet had a clear effect on crypto, but that could change.
This is perhaps why 20.3% of respondents stated that they “did not know” whether the election will impact Bitcoin prices. Meanwhile, one in four respondents don’t believe that the election will have any effect on Bitcoin’s price, perhaps because they believe other market factors at this point in time have greater sway than any election could.
Most Believe That the Election Will Inflate Bitcoin’s Value
Those respondents who stated that they believe the election would impact Bitcoin’s value were asked to go a step further by stating how they believed it would impact the price of crypto.
Most believe that the election, apparently regardless of which way it ultimately swings, will have a positive effect on crypto values.
The results were overwhelming. Depending on how one explains fluctuations in Bitcoin’s price, these results may be interpreted as:
- investor belief that traditional financial markets will be negatively impacted by the results, or process, of the election
- investor belief that crypto is a safer investment during times of uncertainty and national strife (two possible outcomes of this contentious election cycle)
Every investor may have a unique viewpoint on why an election—and this election in particular—could drive Bitcoin price upwards (as most believe) or downward. Those who believe that Bitcoin’s price could decline due to this election may foresee a post-election sense of normalcy restoring faith in legacy financial systems including, but not limited to, the stock market.
Though motivations for investing in Bitcoin and other cryptocurrencies range far beyond what will or won’t happen because of a single election, we wanted to get an understanding of how Bitcoin investment is being fueled and interpreted by investors right now. One cannot gain such an understanding without addressing the election, and its potential to shape the coming year.
It appears that most investors believe the election will have some impact, though many admit uncertainty and some believe it will be inconsequential as a determinant of crypto prices. Many who foresee election-related changes in crypto’s value see an upward swing.
One interpretation of these findings is that, in uncertain times, Bitcoin investors tend to see crypto as more detached—and therefore insulated—from societal unrest.
Survey Analysis Part 3:
Projecting Bitcoin’s Value Against Legacy Investment Vehicles
It is not possible to decouple cryptocurrencies like Bitcoin from other investment options. Dedicating any percentage of one’s savings portfolio to cryptocurrency necessarily means foregoing another investment.
This is why we can see someone totally invested in crypto as comparatively bearish on other investment options (stocks, gold, bonds, etc.).
Those who are not invested in cryptocurrency at all, despite understanding the general dynamics of crypto and how to become invested, may be seen as comparatively bullish on legacy financial investments.
Of course, one can have a positive opinion of legacy investments like stocks or gold while also being optimistic (or even certain) of Bitcoin’s value. This intersection is where portfolio diversification becomes relevant and valuable.
An investor’s portfolio speaks, but it only says so much. To get to the heart of Bitcoin investors’ views on cryptocurrency as it relates to other investment options, we asked:
- how investors view Bitcoin’s long-term prospects
- how Bitcoin compares as an investment vehicle with gold, stocks, real estate, and the U.S. dollar
The answers we received speak to investors’ projection for not only cryptocurrency, but the economy as a whole.
Belief in Bitcoin’s Upward Trajectory Is Strong
Before asking investors to compare their confidence in Bitcoin versus specific legacy asset classes, we asked them what their view of Bitcoin is in its own right.
A significant majority (65.8%) of investors see the price of Bitcoin continuing to rise on a long-term trajectory.
There are several reasons to believe this will be the case, beginning with history.
In 2013, a Bitcoin was worth approximately $13.50. Today, it will cost you over $17,000 for the same Bitcoin. Talk about ROI…
Though Bitcoin no longer holds hidden-gem status, those who believe its price will continue to rise may cite the security benefits of blockchain technology, the economy’s general trend towards digital currency, and a growing slate of decentralized finance projects as reason for optimism.
Only 17.3% of respondents described themselves as “bearish” on Bitcoin’s value as a long-term investment.
These investors could fear Bitcoin’s significant value fluctuations, may believe that legacy financial investments will always reign supreme, or may have other reasons for their bearishness.
For now, prevailing sentiment seems to be that Bitcoin will continue to rise in value.
Investors Prefer Bitcoin Over the U.S. Dollar
The crypto investors who we surveyed apparently do not have much faith in the “full faith and credit” of the U.S. government.
66.3% of them stated that they believe Bitcoin to be a better long-term investment than those tied to the U.S. dollar:
This one is not difficult to figure out. The dollar’s purchasing power has been on a precipitous decline for nearly a century, U.S. national debts are massive and accruing unsustainable interest by the millisecond, and much of the U.S. ‘s manufacturing infrastructure was exported long ago.
Price fluctuations and all, Bitcoin has far more upside than the U.S. dollar, and investors know it.
Bitcoin Is Slightly More Popular Among Investors Than Real Estate
We asked investors whether they consider Bitcoin or real estate to be a better investment in the coming 5-10 years. Understanding that such a defined time range could be important, 52.3% of respondents said they believe Bitcoin to be a better investment, while remaining respondents preferred real estate.
This is not to say that investors believe that Bitcoin will be more valuable than real estate in 20 years, 30 years, or a century—only that it will be more valuable in the next 5-10 years.
While the fact that the majority (slight, but still a majority) prefer Bitcoin to real estate indicates how bullish many are on digital currency, you must also consider:
- that different investors may have different (either favorable or unfavorable) personal histories investing in real estate
- that everyone’s conception of a real estate investment may be different, and therefore more or less appealing
- that opinions about where real estate prices may trend in the next 5-10 years could differ wildly
Owning property is one of the most tangible investments that one can make, and there is clearly still very much an appetite for real estate investment.
However, amongst our respondents the promise of Bitcoin appears to slightly outweigh that of real estate in the next decade.
Bitcoin: More Precious Than Gold?
Is Bitcoin more precious than gold? Yes, if you let our respondents’ answers determine your viewpoint.
Investors may buy gold or Bitcoin for similar reasons, namely as hedges against the volatility of the dollar and the stock market. Some of the reasons why an investor may choose Bitcoin over gold include a higher perceived value ceiling and greater ease of conversion into other asset types.
Gold has the benefit of a longer track record of value (and therefore historical precedent for value fluctuations), a higher value floor, physical tangibility, and greater understanding by the general public.
These respective benefits considered, the majority of respondents
(57%) preferred the odds of Bitcoin out-earning gold in the next 5-10 years—though opinion was split fairly evenly.
Bitcoin Versus the Stock Market: Bitcoin Wins
Bitcoin has been likened by some to a stock due to the way that its value ebbs and flows. One may perceive the risks and rewards of investing in Bitcoin as similar to investing in a stock, as the greater potential for a boom comes with the converse potential for sudden price decrease. These similarities may account for a near-split in how investors view stocks versus Bitcoin.
There is some ambiguity that exists within these answers. While Bitcoin is Bitcoin (a single, specific type of asset), the term “stocks” could refer to:
- a specific stock, like Apple
- an index fund
- a specific market, such as NASDAQ or Dow Jones
- either foreign or domestic markets
Regardless of the metric for “stocks,” the fanfare for Bitcoin is easy to understand.
If one looks back at the past decade, even Warren Buffett’s portfolio cannot hold a candle to Bitcoin’s returns.
Though such exponential returns may be out of reach for Bitcoin going forward, the majority of investors believe that Bitcoin could still outperform the stock market in the coming decade or so.
So how much—exactly how much—do investors see Bitcoin growing (or falling) by in the next ten years?
There Is No Consensus On Where Bitcoin Will Be in 10 Years
No question produced greater, more evenly-split division than that of where Bitcoin’s price will be by 2030. While a significant portion of respondents (11.3%) see Bitcoin’s value cratering to less than $1,000 in the next decade, 10.3% believe that a single Bitcoin will be worth $100,000 or more (reminder that it is currently valued around $17,000 per coin).
In a time when two people could disagree about the color of the sky, this sort of polarization regarding the future of Bitcoin seems only fitting.
Projections about the price of Bitcoin fell within every price range presented to respondents, as:
- 16% see Bitcoin’s value staying relatively stable between $10,000 and $20,000, where it currently lies
- 12.8% foresee a moderate value increase to between $20,000 and $30,000
- a combined 15.1% of respondents anticipate a price jump to between $40,00 and $100,000
- 4.8% believe that Bitcoin’s price will exceed $500,000, at which point those respondents will undoubtedly be living in castles paid for by their crypto-heavy investment portfolios
Others are more bearish, as:
- 10% of respondents project Bitcoin to be less than $5,000 (but more than $1,000) by 2030
- 12.3% of respondents see Bitcoin falling in value to between $5,000 and $10,000 in the coming decade
Those who see Bitcoin’s price falling or remaining stagnant in the next ten years listed several reasons for their belief, including:
- the threat of regulation (32.4%)
- government-issued bans on Bitcoin use (and perhaps other crypto) (20.6%)
- Bitcoin being replaced by another cryptocurrency (perhaps government-issued) (17.6%)
- waning hype (16.2%)
- lack of practicality (9.6%)
Bitcoin believers offered their basis for bullishness, including:
- Bitcoin adoption has much room for growth (43.2%)
- declining trust in alternative currencies (including but not limited to the U.S. dollar) (29.9%)
- a rise in Bitcoin investment sparked by a major economic depression (25.8%)
None of these rationales is ludicrous. Meritorious cases can be made for each and every one. In time, one or more of these schools of thought will be proven correct.
What We Learned About the Future of Bitcoin and Cryptocurrency
There is only one correct answer to the question of where Bitcoin’s price will rise or fall to by 2030, and it is that we don’t know. Anticlimactic, to be sure, but we’re not here to string a yarn for you. Even Satoshi Nakamoto can’t know for certain where Bitcoin’s price is headed, whether it is in an hour or in ten years.
Collectively, respondents’ opinions underscore how uncertain we are regarding Bitcoin’s future value. Those who purport to be hyper-confident in their projection could be proven just as wrong as those who are completely uncertain about where Bitcoin’s price point will be in ten years.
If one thing holds true throughout history, from the eras of Genghis Khan to those of Andrew Carnegie and Elon Musk, it is that circumstances change. Without fail, man’s best-laid plans and predictions are proven laughably incorrect.
Many of our respondents offered opinions showing bearishness towards Bitcoin and cryptocurrency more broadly. The majority of respondents revealed themselves to be bulls for Bitcoin.
If you had to make a bet regarding the future of Bitcoin and you were using our respondents’ answers as the basis of your wager, then you’d have to bet on Bitcoin.
You’d bet on Bitcoin over real estate, gold, the U.S. dollar, and stock markets (to varying degrees). Depending on the response you chose to weigh most heavily, you might even bet the house.