How Accurate Were Bitcoin Price Predictions About 2020?

At the end of what proved to be an incredible year for Bitcoin, it’s worth taking a look back at some of the predictions crypto industry figures made about where BTC’s price would be at the end of 2020.

A year ago, when we reviewed predictions for the beginning of 2020, most predictions were quite inaccurate. This year, when we looked at predictions for “the end of 2020,” they fared better. 

Below, we’ve assessed the predictions of 17 figures in the blockchain industry against Bitcoin’s actual price on Dec 31, 2020: $28,841, according to Yahoo Finance. All predictions were made at least 12 months ago, and published publicly. In cases where someone predicted a range, we have listed whichever end of the range was closer as the prediction. In cases where someone said “above” or “below” a specific number, we’ve listed that number as their prediction.

(Many other folks have made predictions about Bitcoin’s price, but we selected this group by focusing on people who made predictions specifically about the end of 2020, and who predicted either a specific price or a reasonably narrow price range.)

Easily the most famous prediction for Bitcoin’s price at the end of 2020 was John McAffee’s $1,000,000 forecast. He famously and repeatedly promised to eat his own genitals if he was wrong, but he weaseled out of the bet in early 2020, claiming it has been a publicity stunt. Good thing, too, as his “prediction” was far and away the worst of the bunch.

Aside from McAffee’s, most of the predictions are actually reasonably close, at least if we factor in the difficulty of forecasting the price of a notoriously volatile asset a year (or more) in advance. 

Perhaps most remarkable were the predictions of Alexander Zaidelson and Danny Scott. Both of them were within 5% of Bitcoin’s actual price.

So why were predictions better for 2020?

It’s possible that people are getting better at understanding Bitcoin’s price fluctuations, or that we simply picked better predictions to assess this year. But the actual reason may be simpler: Bitcoin’s price went up.

With a few notable exceptions (like Calvin Ayre’s $0 price prediction last year), the people who are asked to predict Bitcoin’s price are typically people involved in the cryptocurrency industry. They are, for the most part, people who would like to see Bitcoin’s price go up.

Psychology research suggests that humans tend to be overly optimistic when making predictions. According to one 2011 study, it’s pretty universal: “Optimistic errors seem to be an integral part of human nature, observed across gender, race, nationality and age.”

It stands to reason, then, that Bitcoin industry insiders who want to see the price rise will tend to err on the side of optimism when it comes to predictions. In 2019, most crypto insiders predicted a rising price. In 2020, they predicted a rising price again. 

The reason the “end of 2020” predictions seem far better than the “beginning of 2020” predictions may be simple: Bitcoin’s price went up dramatically in 2020.

And what are the price predictions for 2021? Once again, it seems like many insiders are aiming high. No less a source than Citibank reportedly expects the price could break $300k by the end of 2021.