How accurate are people in the industry for the 2020 Bitcoin price prediction?

Source: LongHash

Editor's Note: The original title was "How accurate is the Bitcoin price prediction in 2020?"

Where is the price of Bitcoin going? Thousands of investors want to know the answer to this question, and the market has never been short of expert celebrities who have jumped out to express their opinions. But how good is the industry's prediction of the price of Bitcoin?

A few years ago, we observed some people's predictions for the currency price in 2015 in 2014, and we found that almost everyone was overly optimistic about the price of Bitcoin (the results showed that they were all very wrong). Now that we have entered 2020, we try again to review the predictions made by people in 2019 about the price of Bitcoin at the end of 2019 or “by 2020”.

Perhaps unexpectedly, we reached a similar conclusion: almost everyone was wrong, and most people were too optimistic.

We list the results of this analysis in the table below, where one column calculates the predicted price as a percentage of the actual Bitcoin price (based on the Bitcoin price of $ 7050 at the time of writing).

We used an "accuracy" rating standard to classify the various predictions-prediction errors with less than twice being "minor errors", errors between 2-3 times being "general errors" and errors being 3-10 times Are "serious errors", and those with an error of more than 10 times (or predicting the price of coins to zero) are "extreme errors".

The blue lines in the table indicate that the price range is predicted rather than a single price. In this case, we list the end of the predicted price range closer to the actual price of Bitcoin as the data for its price prediction. Among them, the interval given by Joel Kruger contains the actual price of Bitcoin, so we highly value his correctness.

Since this study is limited to Bitcoin's "to 2020" or price predictions at the end of 2019, this table does not actually include some of the crazier predictions of the price of 2020 coins, such as John McAfee ) The infamous prediction-he used to be very crazy bet that Bitcoin would reach $ 1 million in 2020.

We can learn from this data.

First, even in a relatively short time frame like one year, most predictions of the price of Bitcoin may be wrong. Mathematical models, like those in the industry, fail to give correct predictions; no one can really understand the price of Bitcoin.

Second, some of the worst predictions come from hardcore supporters of other cryptocurrencies. For example, Calvin Ayre predicts that Bitcoin will return to zero, and as the founder of Bitcoin rival BCH, this is clearly an egoistic prediction.

Furthermore, forecasters often give falsely high prices. This may simply be because 2019 was a relatively disappointing year for Bitcoin, or those who are asked about the price of Bitcoin are often Bitcoin enthusiasts. But it's worth noting that science shows that most people-about 80% of them according to this article-will show "optimistic bias", that is, they tend to be over-optimistic when forecasting the future, and eventually prove to be Wrong prediction.

This is not a bad thing, because science shows that optimists tend to be at least healthier and longer. In general, our tendency to be unrealistically optimistic may be an evolutionary advantage, but it also means that we may need to be particularly careful when investing based on forecasts.

In any case, when it comes to highly volatile assets like Bitcoin, trying to make predictions may be pointless. This is what Fundstrat Global Partners came to after months of making the forecasts listed in the table above. In December 2018, the company told its customers that due to "the inherent volatility of cryptocurrencies," the company will no longer predict bitcoin prices based on the timeline.

LongHash , read the blockchain with data.