The cryptocurrency market is evolving since Bitcoin went from an interesting experiment in mainstream investment portfolios to a new asset category & digital gold. The road has been bumpy and rocky with 95% of crypto predictions turning out to be false.
For example, Anthony Pompliano, a crypto venture capitalist tweeted in 2017 that all cryptos will moon by 2019. He foresaw BTC hitting $100,000, Ethereum surging to $3,000, Litecoin reaching $2,500, and XRP hiking to $10. Unfortunately, you can throw those predictions in the dustbin because BTC hit $7,550, Ethereum at $140, Litecoin at $44, and XRP broke at 20 cents. Tom Lee has always remained unfaltering in his Bullish BTC price predictions. He place BTC at $40, 000 in 2019.
There are articles and posts on Reddit Forums and Facebook about currency predictions in the next 6 or 12 months [end of the year]. Such content drives traffic because every trader is curious to know which currency will moon. Many predictions just generalize what will happen if the present trend contributes. If a crypto coin hit 10% more than last year then many online news publications and magazines predict it will grow 10% again by the end of this year.
95% of predictions are a total failure and 5% that come true are sheer dumb luck. Even an unreliable instrument or a person can occasionally give the right information by accident.
Based on speculations
Predictions about the cryptocurrency market are hard because they are based on assumptions and rumors instead of fundamentals. The majority of investors hardly has any knowledge and get tempted to invest in cheap coins. Without giving second thought they take a large gamble with the hope of getting astronomical returns. It is sensible to know the fundamentals of the cryptocurrency market before your download the Dogecoin trading app. ZenGo X is a great online resource for increasing cryptocurrency trading knowledge.
Even a loose remark from intellectual giants like noble prize winner Paul Krugman, an economist cannot be held against him. In 2013, Krugman expressed his skepticism about BTC. He doubted if BTC would really work as a currency. Bitcoin has reached a $2 trillion market cap, which means it has the potential to be in league with Microsoft and Apple if it was a company.
Too much confidence
According to research focused on predictions, there were 284 participants involved including experts in economics, journalism, history, and political science. They made combined predictions of 82,361 for the future. Later after what actually occurred, the predictions were compared. It was concluded that the more confident an expert gets about their prediction the chances of them going wrong increases. Therefore ignore comments on Reddit telling confidently that a specific crypto coin will not fail and will 100% skyrocket.
No analytical support
Crypto investors must skeptically look at price predictions because the majority of them lack analytical support. The bullish price prediction will tempt investors. For example, an investor holds Tezos priced at USD 1.89 in his XTZ wallet and will easily believe that the coin will hit $5,000 just because he wants this to be real.
Always be skeptical about predictions
Even if price prediction uses analysis they fail. It is because many factors that play a role are still unknown to the cryptocurrency community. Therefore cryptocurrency investors need to be skeptical about latest price predictions.