Market 7-day Recap with Bitcoin Price Prediction
Before we get to our Bitcoin price prediction, let’s recap. The cryptocurrency market cap over the past 7 days has reduced again. With the week starting out at ~$291 billion and finishing at around $246 billion, the total decrease is approximately $45 billion or -15%.
Not in the mood for reading? Here’s our video version:
Trading at the beginning of the week started at ~12 billion, finishing at week’s end at $10.3 billion. Mid-week saw a sharp increase in trading volume, with a peak of $18.9 billion being hit on 27th of June before a sharp drop off.
Figure – Coin market cap
Bitcoin dominance over the past 7 days has grown significantly with the week starting at 39.90% and finishing at 42.5%. All in all, a growth of 2.6%.
Figure – Coin market cap
Google trends searches for Bitcoin, Ethereum, Ripple and cryptocurrency this past week showed some spikes early on and towards the middle of the week. These movements show strong correlation to the dips that occurred on June 22nd, and on June 24th.
Interest in Bitcoin for the week was strongest in Brazil.
Figure – Google trends
Bitcoin Price Prediction
During the week, we published an article where we examined both data and expert opinion on whether Bitcoin and cryptocurrencies will have a strong recovery this year. So let’s go over my overall Bitcoin price predition and how I came up with it.
My highlights from the blog start with the Mayer Multiple. This indicator was created by Trace Mayer, a long time Bitcoin investor and economist.
Mayer is famous in the Bitcoin world for his incredible insight and knowledge into economics and the fundamentals of money. He’s been talking about Bitcoin as an investment since 2010. Here is a video from 2013 where Mayer is featured on Fox News talking about the Bitcoin price around $130!
In our blog during the week, the Mayer Multiple was at 0.67, today it’s at 0.62, which is incredibly low.
Jun 28, 2018: The current Mayer Multiple is 0.62 with a $BTC price of $USD 6,142.35 and a 200-day moving average of $9,889.74 USD. The @TIPMayerMultple has historically been higher 94.71% of the time with an average of 1.55. Learn more at: https://t.co/9n0xlTWuNP
Basically, the MM gives an indicator of how overbought or oversold Bitcoin is. Additionally, it tells us that this number has historically been higher 94.71% of the time.
So this Bitcoin price prediction basically means if you were going to use this indicator to time an entry into Bitcoin, it might not be a bad time at all.
We then took some research from Bit Trade Australia’s own Rabbi Ahmed, who by using ‘Wall Street psychology of a market cycle’, points out that the market is currently in the depression cycle. The depression cycle is what follows a large bear run, and is the precedent before the market starts to pick back up again.
It’s absolutely fascinating to see just how similar and correlated these two graphs are. I can say from experience that traders, investors and the general industry are feeling the slump.
At a recent conference I attended in San Francisco, the reduction in attendance numbers when compared to a conference I attended in February were noticeable. Google trends shows us that interest is the lowest it’s been in 12 months. Given the fact that I am in this industry myself and know many others who are also, I can tell you it’s true.
ING Bank Cryptocurrency Survey
Australia was targeted specifically. The results of the survey yielded some very interesting results.
The first question given to the participants was, ‘Have you ever heard of cryptocurrency’? Up to 70% of Australians answered yes, compared to Belgium which was 38%. The US scored 57%.
A point to note here is that just because you’ve heard of something does not mean you know about it, have acted on it, or would consider it again. It literally just means that 70% of people have heard the word ‘cryptocurrency’ at least once.
What Country Owns the Most Cryptocurrency, and Why?
The next question was in relation to owning cryptocurrency, to which Australia scored just 7%. Turkey scored the highest at 18%.
This, in my opinion, is one of the most important metrics of all in this survey. The main reason why is because of stocks. This correlates directly to the public opinion around Bitcoin as an investment.
A study completed by the ASX in 2017 shows that up to 37% of Australians invest on a securities exchange. Of this 37%, there is a 31% ownership in shares, a 7% ownership in derivatives, and 11% of ‘hold other on-exchange investments’.
The Australian stock exchange is currently worth $1.98 Trillion AUD, with the number of listings totaling 2,258 at the time of writing.
So, let’s do some math here. If 20% of the 37% invested into stocks own no cryptocurrencies, but make the decision to buy some, then let’s also assume that the current 7% who do own cryptocurrency don’t own stocks.
Alright, so 20% of the 37% who own stocks decide to buy some cryptocurrencies, and let’s also assume they move 50% of their stock portfolio into cryptocurrencies. So 50% of 20% is 10%. How much money would that be moving into cryptocurrencies?
The Journey from Stocks to Bitcoin as an Investment
Well, stocks are owned by companies, people, managed funds, superannuation, and more. So to keep it simple, let’s just assume 5% of the money in the ASX moves into cryptocurrencies, so 5% of $1.98 trillion is around $99 billion AUD.
$99 billion in cash flowing into cryptocurrencies needs to be multiplied by 25. That’s because that is the conservative estimate of cash-to-market cap used by firms such as Fundstrat and Ark Invest. So multiply $99 billion by 25, we get a market cap of $2.475 trillion. I know that seems hard to imagine right now, but remember, we took just 5% of capital from the ASX for this experiment.
A Market Cap of $2.475 Trillion. Is it Possible?
So what would the prices of the major coins like Bitcoin and Ethereum be at a market cap of $2.475 trillion?
Well, we need to make some more assumptions, firstly we need to assume a circulating supply of Bitcoin and a circulating supply of Ethereum. For the sake of this experiment, let’s assume Bitcoin will be 18,000,000 and Ethereum will be 110,000,000.
We also need to assume the market dominance of each so we know how much of the total market cap to take. Let’s just assume they remain the same as what they are now, which is 42.5% for Bitcoin, and 17.7% for Ethereum.
Let’s Crunch the Numbers!
Ok, so 42.5% of the market cap is $1,051 billion, or $1.051 trillion.
The price of Bitcoin based on our above assumptions would be $58,437 AUD per Bitcoin.
So 17.7% of the total market cap is $438 billion, or $0.438 trillion.
The price per Ether token based on our above assumptions would be $3,982 AUD per Ether.
Pretty crazy right? Really makes you think twice about Bitcoin as an investment! Well, remember a few things here. Firstly we only took 5% of the money from the ASX, that’s just the Australian stock exchange. Secondly, we made the above calculations assuming the total circulating supply of Bitcoin and Ethereum was available to trade. In fact, it is far less than this!
Big Announcement Coming from ETHOS
In a recent Tweet, Ethos marked their first-year anniversary since inception with a message about an exciting announcement coming soon.
What the tweet means could be anything, but based on more tweets that have come from Shingo himself (who was recently at the New York Stock Exchange), the announcement could be a big deal.
Nice view of the NYSE. Partner meetings in NY – guess what happens when you are a safe and compliant crypto company? #delivering #ethos pic.twitter.com/Zv4NSujRTn — Shingo Lavine (@shingolavine) June 20, 2018
Having been an investor into Ethos myself ever since the ‘Bitquence’ pre-sale, I have been following the progress closely over the last 12 months.
From the time that Stephen Corliss was brought on, I had an underlying suspicion that Ethos was going to target B2B as well as B2C. A fairly novel concept still in the cryptocurrency space, given there aren’t a lot of platforms able to bridge the gap between the traditional finance space and the crypto space.
If Ethos can pull it off, then this company may end up in the crypto history books. One thing is for sure. I’ll be keeping an eye on the announcement tomorrow!
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Beau is the Founder & Chief Editor at Cryptocurrency Australia Media, an educational platform designed to help anyone learn about cryptocurrency investment and blockchain technology. Beau is also the Founder & Principal Consultant of Blockchain Management Solutions, a specialist technical and project management consultancy, is an advisor with Masternode Ventures, a blockchain incubator, and is an advisor with THORChain, a new decentralized exchange protocol.