8 Bitcoin Predictions for 2020–2025 (Updated November 2023)
How are my original 2020 Bitcoin predictions holding up?
This story is periodically updated with the latest developments on each prediction. However, the original predictions themselves remain exactly as was.
Original predictions made in February 2020.
Latest update: 5th November 2023
It’s rare that I make predictions about, well, anything really, but especially something as fluid as Bitcoin. In fact, since I’ve now been full time in cryptocurrency space for some years, I, of all people, should know how difficult it is.
It’s not that I don’t like to do it — there’s definitely something fun about making them and coming back later to see how you did — it’s just that to do them properly requires a significant time investment. It’s not something you do lightly or spout off quickly with nothing to back it up.
To that end, I’ve been quiet for a while researching and building this article. Yes, these are my own viewpoints and should obviously not be taken as any form of gospel, but I’m happy to publicly put my name on them as scenarios I believe have a very decent chance of actually happening.
They’re based on those several years of being full time in the cryptocurrency space, logical application of macroeconomic theory, previous experience in the direct involvement of new tech, most notably the internet itself, and a generous helping of gut feeling, intuition, and hunches.
Prediction 1: Bitcoin adoption will suddenly accelerate in the early 2020s
Accepting Bitcoin in its native form, especially in a retail environment, is not easy. Sure, newer interfaces make it not much different from using NFC on your phone, but confirmation is still too slow for most applications and it can be expensive. Of course, the retailer has also got to be set up with the equipment it needs which must work with its existing Point Of Sale (POS) systems and then the company must account for it somehow.
All that extra effort is currently not really worth it and any Bitcoin payments that are made are usually done for novelty rather than convenience.
Even so, figures released recently from BitPay, one of the leading Bitcoin payment processors, showed that it handled over $1 billion worth of cryptocurrency transactions in 2019 with Bitcoin the clear leader in terms of volume and value. Coinbase Commerce also processed $135 million across thousands of merchants at the same time, a 600% increase over the previous year.
Of course, this is tiny compared to the £3.7 trillion processed by credit card companies in 2018 (source: U.S. Bureau of Consumer Financial Protection) but adoption at this stage is still very small and this is a problem that is being worked on from a number of different angles and by a number of different companies, very aggressively and very quickly.
Whilst many retail companies (including household names such as Subway, Burger King and KFC) have experimented with accepting Bitcoin directly on a limited basis, this year (2020) will see a very significant and well-financed Bitcoin adoption program driven by Starbucks in association with its partner on this project, Bakkt.
The aim is that by July 2020 all Starbucks 30,000 stores will be able to accept Bitcoin directly through Bakkt’s new consumer app. The fact that Starbucks ’ classic demographics happens to closely match that of the typical Bitcoin user’s demographic has not been lost on market analysts.
Bakkt is also backed by Microsoft and ICE, and, should this experiment be successful — and I personally believe it will be — the implications for fast and aggressive roll out to other major retailers is inevitable.
No-one will want to be left behind.
Update February 2021:
CONFIRMED. Both institutional adoption (covered in this article) and consumer adoption (covered here) have accelerated significantly in mid to late 2020, undoubtedly aided by the effect of Covid-19 and the unprecedented Quantitative Easing that resulted. But Bakkt’s offering never really got going.
In the last quarter of 2020 and early 2021, retail adoption has accelerated due to Paypal’s involvement and increased awareness. Cambridge’s third Global Cryptoasset Benchmarking study stated that there were 100 million Bitcoin users in late 2020, but Willy Woo, a respected Bitcoin analyst recently increased that to 135 million. In any event, the rate of growth has accelerated significantly, but also in slightly different ways to those predicted.
Update November 2023:
SERIOUSLY CONFIRMED: Oh boy, did I get this one right! This was written before El Salvador adopted Bitcoin, a country I visited myself on a couple of occasions to buy stuff with Bitcoin using the Lightning Network. Bitcoin adoption is happening by the day, largely thanks to activities by Jack Mallers in the US, but things are also happening here in the UK.
Companies like Bridge2Bitcoin have sprung up offering payment solutions for retailers using Bitcoin and the Lolly POS system, prevalent in universities and corporate cafes around the UK, now have Lightning built in at native level allowing quick and easy acceptance by any retailer with their system
Don't get me wrong, there is a long, long way to go and whole bunch of problems to sort out, but the trend is undeniable. This prediction was to over the period 2020–2025, so there’s still 13 months to go and I suspect this will move ahead more quickly now making Bitcoin acceptance at least not “uncommon” by then.
Prediction 2: Bitcoin will increase it’s dominance back to pre-ICO (Initial Coin Offering) levels
It’s no secret that I have always had a problem with many of the altcoins (that’s alternative coins to Bitcoin) and why they’re required.
To me, there’s no doubt that the vast majority are useless, scammy, pointless or simply well-meaning but surplus to requirements. Of the 5089 listed on coinmarketcap.com as of this morning when I am putting this article together, I would say that well over 5050 are not required. In fact, I’d be surprised ultimately if that list was longer than 5 or 6, including Bitcoin.
This is a bold and contentious statement, but the reality is that I find it increasingly hard to understand why you need to use different currencies for different applications when it is simpler, easier and more logical to use just one.
After all, we already have multiple global currencies in traditional fiat form (dollars, pounds, euros, etc) that we constantly have to re-calculate in our heads to give us a figure in the currency we are most used to. There is no need to recreate this situation in a virtual sense. The time has come to simplify.
I’ve been in the industry long enough to know that I will come under fire from the passionate factions that exist within it, but understand I am not necessarily ‘dissing’ your project. Yes, there may be faster and more anonymous systems but there are (different) problems with those and the fact is that Bitcoin is already entrenched as the global reserve currency of the cryptocurrency world. It is the value yardstick against which everything is both measured and accessed.
Until that changes — and there are no real moves anywhere in the industry to do that currently — that position is not threatened. The logical conclusion, therefore, is that dominance will increase over time and Bitcoin's importance will grow, not dwindle.
In the interests of full disclosure, it may seem counter-intuitive to admit that my portfolio does contain around eighteen different coins that aren’t Bitcoin. This, of course, is far more than I am stating will have a value or use proposition in the future in this prediction.
The reason? Whilst I am certain that Bitcoin’s position will continue to strengthen, I can’t be sure which alternative options will have the opportunity to thrive. This is simply a question of hedging and diversification and basing my investment decisions on many hours of my own research and analysis.
Update February 2021:
ONGOING: At the time of writing the original article on February 4th 2020, Bitcoin dominance was 65.52%. As at February 2021, it had actually dropped slightly 62.3%. This prediction has therefore not happened yet, but I still expect dominance to increase, though perhaps not to the same levels anticipated previously.
Update November 2023:
ONGOING: As at today, Bitcoin's dominance has now fallen to 52% at a price of $35,500. Since the original article was written, thousands more coins have joined and more stable coins have been created. It now seems unlikely in the short term that Bitcoin's dominance will get back to where it was — at first glance at least.
Bitcoin's value proposition and global accessibility far exceeds literally everything else combined and, in my view, it’s only a matter of time before this plays out. Of course, Bitcoin is not crypto, so there’s another argument to say whether this measure is actually relevant these days. Either way, this one is still in play!
Prediction 3: The Lightning Network will change everything
I have to admit that I have been very skeptical of the Lightning Network since the early days.
Much of that skepticism comes from the fact that I am not actively involved in its development (I’m simply not good enough in this area for the project to benefit from my input) and therefore have to try and understand from an outsider’s point of view.
The theory is excellent, the execution less so. It is a complex, difficult project that is under continuous development and improvement, although it went live in early 2018. This means anyone can technically use it as long as they understand it’s still risky to do so.
On the balance of probabilities, I believe there is a good chance that it will ultimately succeed and if so, the next generation of wallets and payment mechanisms will use it as the basis of operation. That being the case, Bitcoin will move rapidly from store of value to medium of exchange, or, more precisely, better versions of both.
The likely effect of this is the annihilation of the need for many alternative currencies as discussed above and to remove one of the biggest barriers to adoption in a stroke. This will drive usage exponentially.
However, this is not likely to happen immediately. I suspect it may be another one to three years until this becomes a reality.
Update February 2021:
ONGOING: This one is interesting. Since this original article was written, it could be argued that LN is less important that it was due to the rapid expansion of Bitcoin applications sitting over the settlement layer, such as Paypal and other payment apps and the expansion of Visa/Mastercards linked to Bitcoin wallets, among others.
However, LN is still an important development and I still maintain that this will be a significant part of the ecosystem in the future.
Update November 2023:
ONGOING: I’m tempted to put “confirmed’ here, but I'm going to keep this one as ongoing right now. The Lightning network is currently poised to take the lead as the preferred payment system going forward, but it isn’t the only solution.
Interestingly, I now disagree with my own update in February 2021 when I stated that it has become less important with the advent of PayPal etc solutions, which just goes to show how much the industry is changing and how much or own understanding changes as we delve into anything deep enough.
I’m going to leave this one open until the final update in 13 months time!
Prediction 4: Facebook's Libra will not happen
There has been much talk about Libra, Facebook’s ‘crypto’ currency, being an ‘on-ramp’ for Bitcoin and a way of driving awareness, especially since it was announced in mid-2019.
I personally don’t think it has much value as in the former capacity (and, knowing Facebook they’d probably try and limit access between the two or cut it out completely anyway) but there may be some argument in the latter camp.
Either way, Bitcoin will prevail and Libra will not happen, at least not in the way it was originally proposed.
First, there is no way that any government is going to yield any part of its monetary policy to the private sector and endorsing Libra does, to some extent, do that assuming it approves it in it’s initial proposed form.
Second, Libra would need to be fully licensed in every territory that it operates in the same way as a commercial banking system since it is is, by definition, a centralized, corporate system, just like a bank. There is too much at stake for the powers that be to allow that to happen and, even if it did, it would take years to put in place. Bitcoin, for all the reasons listed above, would render this irrelevant at that point.
Third, Facebook already has extreme issues with trust and data integrity. Whilst it has attempted to address that by involving other companies and forming a separate consortium, the damage may simply be too high for the average user to engage.
It’s telling that out of the original group of companies involved with the project — Mastercard, Visa, Paypal, Stripe, eBay and several others — have pulled out. In truth, I wasn’t the least bit surprised.
That said, I think it is possible for Libra to exist in a limited, central payment processor form, similar to Paypal, or using its own Messenger service as a basis to make instant payments with traditional fiat currency.
But a cryptocurrency in its true sense it will never be. In terms of Bitcoin, therefore, it will be a non-event.
Update February 2021:
CONFIRMED (sort of). Libra’s project, now known as “Diem” has been abandoned in its original form and changed it to something far less useful overall in my view. How and why is covered in this article.
Update November 2023:
Oh it’s dead alright. Never had a chance.
Madness.
Prediction 5: The SEC will approve a Bitcoin ETF
Up until now, the SEC in the USA has been notoriously slow about approving an ETF (Exchange Traded Fund) in Bitcoin, citing fraud, market manipulation and regularity clarity as issues. Cryptocurrency ETFs do exist in other parts of the world, however.
Time after time they have extended deadlines to their statutory maximum and then, unsurprisingly, issued a rejection at the end of it. I think that time is coming to an end and, whilst I don’t think it’ll necessarily happen in 2020, I do believe it will not be long after.
The reality is that Bakkt’s warehousing solution and Grayscale’s Bitcoin Investment Trust (GBTC) have made institutional investment possible although it still isn’t quite as straightforward as it should be at this stage. An approved ETF gives an extra layer of security — peace of mind if you will — for organizations who want to invest in the space, but do not want to take any risks with wallets and storage, moving that requirement to the custodian provider of the product.
One approval is likely to lead to others and this act will open the flood gates for institutional investment going forward.
Update February 2021:
ONGOING — With the notorious anti crypto Jay Clayton stepping down from the SEC in December 2019 and new guidance from the same body clarifying custody, it seems likely that 2021 may be the year for a Bitcoin ETF in the USA. In fact, VanEck have already filed, albeit in a slightly unusual way (story here)
Update November 2023:
ONGOING: The ETF is happening! OK, so I was two years out on my date and, as I write this, it’s not yet technically approved, but check out these articles for the very latest: What will happen when a Bitcoin ETF is approved? and When will a Bitcoin ETF be approved?
I bet you anything that we’ll be marking this one off as CONFIRMED before the end of the prediction period!
Prediction 6: Bitcoin will increasingly be seen as a store of value and a safe haven
Some claim that there have already been some correlation with negative market or local economic activity and Bitcoin being used as a safe haven, but I would say that evidence is inconclusive at best. We’re not there yet.
However, it IS clear that some people who find themselves in an economy that is struggling (Venezuela is the obvious current example) will move at least some of their fiat currency into Bitcoin.
It’s possible to argue that they might prefer to move it into gold, but the reality is that for the average man in the street this is not easy — or cheap — to do. Bitcoin remains the obvious choice as a result.
My view is that we will see this happen more and more in the next year or so, especially if some of the doom-mongering financial prophecies come true to any degree whatsoever. (Although, of course, we hope they don’t.)
Further, my prediction is that this will happen on an individual, rather than institutional, level first. This may then ultimately lead to the same approach being used by institutions as the security, regularity clarity and adoption of Bitcoin continues to grow over time.
Whatever the reasons, this, to me, is an obvious application of the technology in an increasingly digital world.
Update February 2021:
CONFIRMED: To this day the arguments over store of value continue, but for me this is now a given. Bitcoin will not go to zero, holding Bitcoin instead of fiat or gold is now a proven case for wealth preservation across all currencies on the planet. Some firms have even rotated out of gold to buy and hold it. High net worth and influential figures like Michael Saylor, Elon Musk and others are buying and holding as part of their company’s treasury reserves and even conservative organizations like Mass Mutual have moved significant money into play.
Going forward, it will be much more difficult to make the argument that Bitcoin is NOT a store of value, than it is to do the opposite.
CONFIRMED: This is probably now quite a dull point to make and, these days, rather an obvious one. It doesn’t matter which currency you compare it too, Bitcoin has been the best store of value on the planet for the last decade. Since this was written, numerous organizations have acquired Bitcoin for their treasuries, led by Michael Saylor at Microstrategy, and El Salvador has adopted it as legal tender with more countries in the pipeline.
Prediction 7: Bitcoin will be increasingly used as a means to support charities
This may not seem much of a prediction since some charities already started to accept Bitcoin in the last year or so. The Royal National Lifeboat Institution (RNLI) in the UK, Unicef, the Water Project and Teach Africa are among those who already do. My view is simply that this will increase and become far more ‘normal’ going forward.
However, although regular donations via Bitcoin are always appreciated by charities, where it really comes into its own is giving in the case of a global catastrophe, where immediate financial help is required from the rest of the world.
Until now, it has been expensive to collate, send and convert donations from all over the world to one location and there have sometimes been questions over where the money goes and who gets it. Bitcoin solves first the issues linked with collating and sending and also provides just enough transparency to see where those coins go, thereby reducing waste and fraud.
The logical conclusion is that as the other factors listed here take effect, the demand for Bitcoin for charity donations is likely to increase. This is relevant because according to charitynavigator.com, an estimated $410 billion was given globally to charities in 2017 continuing the overall upward trend.
Update February 2021
CONFIRMED. This started to happen very quickly as Covid-19 took hold around the world and new charities are now accepting Bitcoin every day. This includes the The Red Cross, Save the Children, No Kid Hungry and Sea Shepherds among many, many others. For a full (and impressive) list, see here.
Update November 2023:
TOTALLY CONFIRMED: This is done deal and most charities now accept Bitcoin (and some altcoins) for donations. Those who don’t soon will.
Prediction 8: Bitcoin’s price will rise to a New All-Time High (ATH)
With just the factors listed above, the case for Bitcoin’s price increasing above today’s $9,300 is strong. Whilst some of them won’t necessarily happen this year, there is an extra event that we know for certain will happen in just a couple of months — the ‘halving’.
Somewhere around mid-May 2020, the number of newly minted Bitcoin will drop from 12.5 to 6.25 for each block successfully mined. This has the effect of dropping the daily amount of new Bitcoin coming onto the market from 1800 to 900, instantly increasing its scarcity.
There are some analysts who think that the effect of this is priced in since it is known so far in advance, but there are others, like myself, who think that it is not. It’s one thing realizing you’re running out of something, but it’s a different thing altogether when you actually do — your mindset changes completely.
I’ve written on this subject regularly before so I won’t reiterate the same points here. However, historical factors, maths, and well-established economic theory make for a compelling argument to support a significant price rise going forward.
My personal prediction is that Bitcoin will see a new all-time high, ie above $20,000, before the end of 2020.
Update February 2021
CONFIRMED. It may have left it to the last minute, but Bitcoin broke the previous all time high on November 30th 2020. Since then Bitcoin has smashed though all previous barriers and is currently sitting at over $44,000 at time of update.
Update November 2023
CONFIRMED …. AND ONGOING! At the time of writing the original piece, Bitcoin's ATH was less than $20,000 and this was utterly smashed when it reached $69,789 on November 10th 2021. It settled down somewhat since then and hasn’t beaten it.
However, my new prediction is that it will do so and set another ATH before the end of this prediction period, ie December 31st 2025.
Conclusion
The cryptocurrency industry is growing and changing fast. Money, resource and expertise are coming into the space in a manner not seen since the early days of internet development. That doesn’t necessarily mean it will succeed, of course, and there is a myriad of issues still to resolve.
However, one thing we can say with certainty is that the next few years are going to be extremely interesting and I, for one, am very excited to be a part of it.
And that still holds true even if my predictions turn out to be not worth the paper they’re written on.
What do YOU think of my predictions? Do you agree or disagree? Please feel free to add your comments below.
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Here’s one more prediction that we can almost certainly say will come true …
We all know the number is growing everyday, but is it thousands, millions or billions? You might be surprised.
As each day goes by this becomes more important (and harder) to do. Here’s why.
Disclosure: The author of this opinion piece has been heavily involved with Bitcoin for several years and holds a substantial cryptocurrency portfolio, including Bitcoin. He also has a mining operation running the SHA 256 algorithm based in Siberia and is a published author on the subject of promoting the understanding of cryptocurrency.
Disclaimer: Investing in any cryptocurrency is extremely risky. The above should not be taken as financial advice, nor construed as so. Always do your own research before investing or consult with a professional financial planner.
