Professional gadfly John McAfee made headlines in July 2017 when he predicted that the price of Bitcoin would rise to $500,000 within three years. The controversial entrepreneur and international playboy seemed confident Bitcoin would achieve the 22,636 percent rise in value he predicted. If it didn’t, he tweeted, “I will eat my d*ck on national television.”
if not, I will eat my dick on national television.
— John McAfee (@officialmcafee) July 17, 2017
It’s an attention-getting pledge, but that’s just how McAfee talks. Translated into standard English, he meant something like, “I’m cautiously optimistic about the prospects for blockchain-based cryptocurrencies to sustain modest growth over the mid-term.”
McAfee, founder and former leader of the antivirus-software company that bears his name, doubled down on his prediction in November, promising investors that Bitcoin would reach $1 million by the end of 2020. And yes, he renewed his odd cannibalistic guarantee.
Should we care what John McAfee says about the price of Bitcoin?
It’s hard to say. One of Silicon Valley’s early entrepreneurs, he is credited with inventing antivirus software for PCs. His focus on the vulnerabilities of early PCs created McAfee software and earned him more than $100 million. McAfee has used his retirement from the PC world to research a variety of topics.
He has also lent his reputation to controversies, outrageous claims, and crazy conspiracy theories, all of which have been documented online and in print – and even, in 2016, a documentary film produced by Showtime: Gringo – The Dangerous Life of John McAfee. The entrepreneur has championed a sybaritic lifestyle of sex, drugs, and parties.
He seems shameless in the face of questionable exploits. For example, in 2012 McAfee phoned a Wired reporter every half hour while he was evading Belize police seeking to arrest him on suspicion of murder, with lengthy descriptions of his difficulty breathing while hiding out, buried in sand, with a cardboard box over his head.
So it is no surprise that he has kept his name in the headlines by setting interim goals and making short-term predictions about Bitcoin’s march toward the promised $1 million valuation. McAfee claims to use sophisticated software modeling tools to forecast Bitcoin’s value. “I have a doctorate in point-set-topology,” he wrote in a follow-up tweet. “It predicts BTC at $2,431,013 in 3 years. other math systems – between $1,900,000 and $2,600,000.”
On May 24, 2018, McAfee predicted that Bitcoin, then trading at $7,577, would top $15,000 by June 12.
My short term price predictions: in a major dip, with nearly everything dropping, the price of Docademic doubled since my prediction. The market will turn before June 12th and my predictions will hit. My algorithms predicted Trump’s June 12th date. They have never been wrong. pic.twitter.com/IGAzWPtOV4
— John McAfee (@officialmcafee) May 24, 2018
McAfee has theories about bath salts, yoga, police conspiracies, antibiotics, smartphones … any number of things. But he is not your typical crank. His harshest critics concede that he is brilliant.
On the other hand, his predictions often fail to come true. For example, McAfee spent months warning that the Michelangelo virus would lock up millions of PCs on March 6, 1992. That didn’t happen – but fear of the crash did sell a lot of anti-virus software. That fear made McAfee rich.
Bitcoin reversed its price-dropping momentum following McAfee’s bold claim that its value would double in three weeks, with a net rise by the first week in June. Did McAfee predict the modest rally, or did he cause it by encouraging nervous investors?
Bitcoin doesn’t appear to be on track to hit $15,000 by June 12. But the fact is, the price could drop every day through June 11 and then suddenly bounce to $15,000 or $20,000 or more. Volatility is the one essential truth of cryptocurrency valuation.
So the fact is, we don’t know if McAfee’s June 12 prediction is correct. We can’t know, and we won’t know until June 12.
And we can’t know whether McAfee’s prediction of a $1 million Bitcoin is on-target. Cryptocurrency prices are affected by factors and events that are impossible to predict. Tariffs between the United States and its trading partners in Europe and Asia would surely affect the valuation of Bitcoin, for example. But it’s a fair bet that no one knows what tariffs will finally go into effect, if any, and when, and which countries will be exempted from them, and how those factors will interact with other global economic issues to nudge the value of Bitcoin higher or lower.
Government regulation and taxation are wildcards too. Which governments will move to legitimize digital currencies and which will seek to outlaw them? Could those actions affect Bitcoin’s value? You bet. Does John McAfee know what national governments will do between now and 2020? That’s unlikely.
It is possible that an AI system with access to petabytes of Big Data regarding the world economy could accurately forecast fluctuations and trends in the value of cryptocurrencies. It would be difficult to train the neural net at the heart of such a system, however, because the historical data is a shallow pool. Cryptocurrencies haven’t been around that long.
Absent the automated genius of a Go-playing mainframe, cryptocurrency traders have the same tools used by a century of investors specializing in stocks and commodities. Despite the high stakes and large investments in prediction schemes, market investing is still a risky business.
Because they haven’t been around as long and because they have been embraced by a community with little experience in disciplined investing, Bitcoin and other cryptocurrencies are more volatile and less predictable than the stock market. It’s not the sort of market, logic suggests, in which one might prudently wager one’s privates.
No one knows what the future holds, but, whether you’re a seasoned investor or a complete beginner, you can sign up to Kriptomat. A fully EU licensed and regulated platform to easily buy and sell cryptocurrencies in your language.
What are your thoughts on these predictions? Leave your comment below!
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