Bitcoin at $7,000: Five years of a failed prediction

Bitcoin at $7,000: The prediction that has failed to materialize for years

How much is Bitcoin worth if everything supporting it disappears tomorrow? Someone set a specific price and date: 7,000 dollars in six months. The starting scenario was a "complex" year due to the pandemic, the observation that investing in Bitcoin had become common knowledge, and the diagnosis that it was a pyramid scheme destined to leave investors penniless. The same thesis saved digital money as the future, but with a different protagonist: central banks would be the ones mining their own cryptocurrencies, and Bitcoin would not be on that list.

Nearly five years later, that figure remains untouched. The tone, however, has changed. Less crystal ball, more interest rates, inflation, and liquidity.

Why was Bitcoin called a pyramid scheme?

Because the criticism was not aimed at the technology, but at the money supporting it. The argument pointed to a trend rooted in common sense and a structure that, sooner or later, would leave investors without their money. The most frequent rebuttal was mocking: there are more gurus than cockroaches, and questions as useful as asking if it will rain on Sunday.

The only forecast that has been fulfilled with punctuality is that of absurd predictions. Bitcoin at 6 dollars in 7,000 months, at one million in five years, or the commitment not to buy a single damn bitcoino until the price falls to three figures. When a narrative relies on round dates, the calendar usually takes its toll.

A bubble, yes, but on what timeline?

Here is the crux: almost no one denies it is a bubble; the disagreement is about the date. Some admit to being convinced for a decade that it is, and that the last euro will be won by someone else, with one uncomfortable caveat: in those ten years, the asset has continued to distribute millionaire profits to those who held on. The practical conclusion drawn is harsh: it doesn't matter if it's a bubble, a hot potato, or a siren song; the only thing that matters is not being inside when it explodes. And anyone who warns like that assumes it will explode.

The problem is that being right in the long term does not pay the bills in the short term. Nor does it set a floor. Nor does it say when.

What truly backs Bitcoin: the dollar or smart contracts?

The most technical debate pits the dollar against Bitcoin based on the nature of their backing. One side maintains that the dollar, regardless of being a bubble, is fiat money and that its entire issuance represents the value of real assets: if Bitcoin is worth zero tomorrow, dollars can buy a car or a house. The other side responds with an accounting nuance: increasing Bitcoin's issuance limit from 21 million to one billion would be dilution, not a loss of value, just as cutting a cake into four or fifty pieces does not change the cake.

And they add an argument that is not about price: Bitcoin would be the first autonomous and decentralized legal framework to program and execute smart contracts without depending on fiat money. The level of detail reaches fights over whether an autocorrect writes "there will be" or "there may be." That is how the future of money is discussed.

The price levels being discussed: from 10,000 to 30,000

Here comes the arithmetic. A frequently cited scenario proposes a heavy fall to 10,000 dollars, a quick rebound to 30,000, and a slower return to 10,000, all within the same year. Another rules out dropping below 18,000 except in an extensive wick caused by liquidations, with an average of 22,000 for that low.

At the opposite extreme, someone boasts of having buy orders set at 12 dollars, a level that in practice is equivalent to the disappearance of the asset. And among the jokes, the 7,000 figure is already being measured in gold coins, which is the most elegant way of saying that nobody takes it seriously.

What has weighed more: Ukraine, interest rates, or inflation?

The macro context, rather than a single event. Bitcoin already fell 50% between April and May 2021 and months later marked all-time highs in October, which dismantles any linear explanation. Regarding Ukraine, there are two readings: that a local conflict does not move the market, or that without that tension, the 30,000 resistance would hold without a problem.

The explanation that carries the most weight points elsewhere: stock market drops, rising interest rates, the end of tapering, and inflation, all within a general bubble. Removing Ukraine from the map would not have prevented brutal corrections.

What those who stay inside do

Buying discipline. Monthly contributions of 100 to 200 merkels, about 10,000 euros in liquid cash for contingencies, and the bulk of the ammunition reserved for winter, when the price has been stabilized for months. Buying on a dead cat bounce, one warning says, is the fastest way to lose your shirt.

No one disputes the advice to buy a little during dips. What is disputed is when a dip stops being a dip and starts being a collapse. No one has drawn that line.

The 7,000 forecast fulfilled an unexpected function: it served as a clock. Every time the price moves away, the figure reappears, almost like a gold coin. Being right through patience is the cheapest way to be right, and also the slowest.