Experts predict a new boom of cryptocurrencies: is it worth believing?

During the previous month there were a lot of forecasts from experts, with a promise of a new big boom in the cryptocurrencies market. Some of them believe that the new rally can surpass the records of 2017 by dozens of times. Electus collected some "prophecies". Do they have a chance to come true?

What do forecasters promise?

We have taken only some forecasts of well-known experts and investors who promise "to the moon". From our selection, we excluded the forecasts of businessman John McAfee, CEO of Tron Justin Sun and top executives of the top exchanges who are known for excessive optimism, close to propaganda. Only the speakers whose opinion can be taken into account are represented in the selection.

American investment manager, billionaire, the founder of Galaxy Digital Capital Management Mike Novogratz is known for his rather balanced view on the market. In 2017, the investor gave correct forecasts concerning the price of bitcoin, and in early 2018 predicted a large correction in the market, which continues up to this day.
In his new forecast the investor states that the worst times for the market have ended. Moreover, in one of the last posts on Twitter, Novogratz noted that the situation at the market is strikingly similar to the one that was observed last year on the eve of the most active stage of the rally. The investor refers to the indicators of the Bloomberg Galaxy Crypto index (BGCI), which monitors the rates of cryptocurrencies against the dollar. "It seems that the market is returning to a breakthrough," he wrote. Recall that at the peak of growth the market capitalization exceeded $ 800 billion. As of September 17, 2018, it is just over $200 billion.

Tim Draper, one of the pioneers of venture capital investment in the US, outnumbered Novogratz in his "to the moon" expectations. According to the billionaire, who is known for investing in Skype and a number of other top-end start-ups, the size of the cryptocurrencies market can reach $80 trillion in the next 15 years.

"The Internet has changed the industries that had markets of $10-100 billion, the cryptocurrencies go further and will change the industries with the markets estimated in trillions - it's banking and investment, as well as government activities and management," he said to DealStreetAsia.

Another well-known Wall Street veteran, ex-strategist of JPMorgan Chase investment bank Tom Lee is also optimistic. According to the analyst, before the end of this year bitcoin may exceed the historical maximum and reach $25,000 thousand.

Even the Ethereum co-founder Vitalik Buterin, who regularly criticizes the speculative boom in cryptocurrencies, did not rule out that there could be room for market growth. There was a wide response in Twitter caused by Vitalik's comments, who at first stated that there would be no more 1000 multipliers in cryptocurrencies. After being accused in pessimism, Buterin had to clarify his position and it turned out that Vitalik does not rule out a more moderate rise in price. Like, a growth by thousand times would mean a market capitalization of $200 trillion, so you just need to be realistic.

Should one expect "to the moon"?
The famous American trader, writer and philosopher Nassim Taleb in his book "The Black Swan: The Impact of the Highly Improbable" draws attention to the fact that people have never been able to predict fateful events in history and science. Taleb is a merciless critic of experts and economists, the accuracy of predictions of which, in his opinion, is extremely small. The book published in 2007 became widely popular after the crisis of 2008-2009, which was not forecasted by economists of any of Wall Street's top banks. As a result, some of them experienced a crash.
Wall Street also missed the cryptocurrency boom in 2017. Recall that the top managers of banks first tried to ignore it, then named it a "bubble", but in the end they began to study and adapt to a new direction. It is the classic case of a "black swan".
Venture investors often admit that it is almost impossible to predict the success of a start-up. That is why the portfolio model is used. It is assumed that 1 out of 10 investments "will make lots of multipliers" and will repay costs for all the failures. The cryptocurrency market is now in a state of a venture. It may be impacted by hundreds of factors that are out of sight of forecasters.
However, a fresh wave of forecasts, not so important whether positive or negative, can still give the market a push, at least in short-term perspective. The fact is that there is a correlation between the number of publications in the media, searches in Google and the price of a cryptocurrency. It is not even important to have positive publications or negative ones, the main thing is that the public's interest generates purchases. Experienced observers remember hundreds of prophecies about the imminent collapse of bitcoin, followed by sharp increase of the price of the main cryptocurrency. Let them make forecasts, we will check its accuracy later.

Andrei Mastykin, cryptocurrencies analyst of "Electus"
https://t.me/ELECTUS_CRYPTO