Joe Kernen, co-host of CNBC’s Squawk Box program, gave the prediction that bitcoin could reach $55,000 by May 2020.
Bitcoin to $55,000 by May 2020
Appearing alongside guest host Katie Stockton on July 29, who is the founder and managing partner of Fairlead Strategies, Kernen speculated on bitcoin’s price leading up to the next halving. He highlighted May 2020, when the block reward is expected to decrease, as a primary catalyst for the cryptocurrency that could take the price to $55,000.
Stockton appeared more skeptical of the prediction when asked if she agreed with the analysis.
“Oh gosh, $55,000. Is that right?”
Several of the other co-hosts jumped in to express their incredulity over bitcoin’s price movements, particularly the fact that the value always increases significantly in correlation with halving events.
While Stockton did not give a firm price prediction for BTC, she did concede that market basics such as supply and demand still apply when factoring the value of crypto-assets.
“The best way to evaluate it is by looking at the chart. It’s all supply and demand.”
Kernen backed off his prediction slightly by the program’s end, turning to the camera with a shrug and saying “we’ll see.” However, he did point out that similar metrics for supply have been applied to precious metals, such as gold and silver, with some historical success.
Bitcoin Halving & Reduced Supply
The next halving will take the current block reward of 12.5 BTC to 6.25 BTC, cutting into the profitability of miners. The market theory has been that miners will be forced to sell their coins at a higher price to cover operating costs, as opposed to dumping them on the market.
With less bitcoin entering the marketplace and a host of motivated miners willing to wait for the price to increase, most analysts predict that the price of BTC will rise beyond its current level.
There is also a degree of self-fulfilling prophecy at play, where investors pump the price of bitcoin in anticipation that others will expect and increase with the halving.
Bitcoin’s price underwent a rally during the weeks leading up to the last halving in July 2016, but most believe it was the long-term effects that had a greater impact. BTC continued to rise gradually over the next year and a half, before reaching its last all-time high near $20,000 in December 2017.