An Analyst Argues Historic Patterns Could Augur a Soaring Price for Bitcoin

Could the price of Bitcoin be headed back up into the stratosphere? One noted analyst is saying it’s a distinct possibility.

Based on what he sees as recurring patterns in the cryptocurrency’s pricing history, Michael Graham says Bitcoin could be starting its upward climb now toward the neighborhood of $20,000, a price it last brushed with in December 2017. “Theoretically,” the price could reach that peak by March 2021, says Graham, an equity-research analyst with Canaccord Genuity LLC, New York City.

His prediction is included in a research report on Bitcoin released on Friday. Through a spokesman, he refused a request to speak to Digital Transactions News. Bitcoin’s price stood at $3,901 at midmorning Thursday, according to Coindesk.

Graham’s outlook is based on a pattern Bitcoin’s price has traced at least since 2011. In that time, the price has followed a remarkably similar pattern across two four year periods, 2011 to 2015 and 2015 through the first two months of 2019. If the pattern continues, that peak in 2021 will correspond to the previous high in 2017.

Graham concedes that “simple pattern recognition has little fundamental basis.” He also hedges his prediction, noting that “there are different dynamics at play this time around compared to four years ago.” Nonetheless, he points out that the value of the digital currency tends to run on a four-year cycle influenced by the so-called halving of the reward miners collect, which occurs roughly every four years.

The last halving occurred in July 2016 and cut the reward from 25 Bitcoin to 12.5. Miners are the entities in the Bitcoin network that confirm transactions for inclusion in new blocks on the Bitcoin blockchain. The halving operation is built into Bitcoin’s code, which also caps the total supply of coins at 21 million. The total supply as of Thursday stood at just shy of 17.6 million.

From these four-year patterns, “the implication is that Bitcoin would be bottoming approximately now and would soon begin climbing back towards its all-time high of [approximately] $20,000,” Graham writes.

He also cites three new factors at play this year that could help stabilize and reinforce Bitcoin’s price movement. One is the expected introduction in the first half of 2019 of institutional custody solutions, beginning with Fidelity Digital Assets, part of the Fidelity investment empire aimed at helping institutional investors manage cryptocurrency holdings.

“In addition,” Graham writes, “we saw the first major move into the insurance of cryptoassets earlier this year, when BitGo announced that it will insure up to $100 [million] in crypto for its clients via the Lloyd’s of London. And last but not least, the potential approval of a Bitcoin [exchange-traded fund] remains in the works, although the general consensus continues to be that one may not be approved in the near future.”