With the New Year approaching, cryptocurrency investors and traders are preparing for what the markets could have in store in 2020.
Hopefully with a brand new year brand new blood comes to fuel the next big crypto bull run.
According to key cryptocurrency analysts such as Mati Greenspan, Alessio Rastani, Trace Mayers, and PlanB, there is a high likelihood of a Bitcoin bull run at some point within the next 12 to 18 months.
Funnily enough, some economists are predicting an economic recession over the same period. Will this be the final catalyst for a massive cryptocurrency bull market?
If so, will altcoins like Litecoin make huge profits?
Let’s take a look.
Bitcoin price prediction
The price prediction above is based on PlanB’s BTC stock-to-flow model explained in this guide.
In the classic investment area, stock-to-flow models have been used for decades. A stock-to-flow model shows the amount of goods held in stocks divided by the amount produced annually.
This tool can be used and the process replicated with other proof-of-work cryptocurrencies as they follow similar stock-to-flow models.
The only requirements for the stock-to-flow model (or ratio) to make sense are:
- A known (visible and accountable) supply
- A known maximum offer (preferably)
If this model continues to deliver on its predictions for the future, this could happen to Bitcoin in the next few years:
- Bitcoin could hit $ 100,000 sometime in 2021
- Bitcoin could hit $ 1,000,000 sometime in 2026
What’s the recipe for an old season?
There are a couple of factors that help altcoins in bull markets.
While we could argue that technical advances are the most important detail in price, fundamentals are more long-term than short-term.
Looking at the above total altcoin prices (courtesy of Messari.io), we see that the majority have fallen between 80% and 90% since their all-time highs. The cycle has been repeating itself since 2013 when altcoins became a thing.
What then drives short-term price promotions?
Basically pure speculation. The most profitable altcoins include Ethereum, EOS, Bitcoin Cash, and Litecoin. Since the all-time highs for all of these coins were reached in early 2018 and since then most of their value has been lost, can we argue that marketing and network effects are the main drivers of short-term price?
It seems likely.
So when we look at what altcoins could be pumping next, I argue that the top questions we should be asking ourselves are:
- How much money did the company raise?
- What are the media network effects?
By combining metrics from Google Trends, Blockchain Explorer, Wallet Adoption or Social Media Trend Waves, we can get an idea of which Altcoins can experience strong positive price movements.
Not to my surprise, Litecoin is a strong contender.
What does it take for a Litecoin bull run in 2020?
We are proud to support #Litecoin payments. @LTCFoundation and @SatoshiLite did you know CoinPayments was the FIRST to support #LTC payment processing in 2013? https://t.co/U0lITyyges
– CoinPayments (@CoinPaymentsNET) April 27, 2018
I contend there are a few additional ingredients the Litecoin Foundation or major LTC holders can add to the mix to help fuel future profits.
The first is to get the word out that Litecoin has a tough supply, which puts additional pressure on the long-term price as fewer coins are minted every four years.
In addition, Litecoin has a wide variety of partners and merchants using LTC as a payment gateway.
As discussed in this post, the number of LTC traders is growing rapidly, and key players like the Miami Dolphins are helping to bring the Litecoin brand to new markets.
In essence, I believe that Litecoin 2020 can see a bull run if there has to be a bitcoin bull run fueled by the entry of new private and institutional investors.
If Bitcoin breaks new all-time highs, we should expect some of the new money to flow into prominent altcoins like LTC.
Disclaimer: The views and opinions expressed by the author should not be construed as financial advice. We do not advise on financial products.