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PlanB, the creator of the stock-to-flow (S2F) model, reiterated on November 8 that Bitcoin (BTC) is on track to hit $ 100,000. The pseudonymous analyst predicts that the dominant cryptocurrency will hit the $ 100,000 to $ 288,000 range by December 2021.
Bitcoin is expected to rise approximately 545% from the current price to exceed $ 100,000. At that price, BTC’s market cap would be approaching $ 2 trillion, or roughly the same as Apple, the world’s most valuable company.
Why $ 100,000 + and why is it 2021?
The S2F model attempts to predict the long-term price trend of Bitcoin by evaluating its supply. Namely, it takes into account its fixed offer and halving the block reward, which reduces the rate at which new BTC is produced or “mined”.
The theory behind S2F is that as Bitcoin supply decreases over time, inflation would continually increase. These two factors could theoretically amplify the bullish trend of the leading cryptocurrency.
Based on Bitcoin’s supply curve and halving cycles, S2F places the expected valuation of BTC at $ 5.5 trillion. The model predicts that Bitcoin will reach a multi-billion dollar valuation before 2024. The model reads:
“The S2FX model estimates a market value of the next phase / BTC cluster (BTC S2F will be 56 in 2020-2024) of $ 5.5t. This results in a BTC price (given 19 million BTC in 2020-2024) of $ 288,000. “
In a tweet, PlanB said he is confident that the $ 100,000 price projection of the S2F model for Bitcoin will materialize.
2021 is particularly important for Bitcoin as it follows an expected halving of the block reward in May 2020.
Six months ago, Bitcoin experienced its third halving in history. This cut the number of BTC mined each day by half, which would cause the circulating supply to drop over time. The analyst he wrote:
“People ask if I still believe in my model. To be clear: I have no doubt that #bitcoin S2FX is correct and #bitcoin will hit $ 100K-288K before Dec2021. In fact, I have new data confirming that the supply shortage is real. IMO 2021 will be spectacular. Not financial advice! “
So far, following the halving, Bitcoin has moved from $ 8,700 to $ 15,500, registering a 78.1% rally in six months.
Bitcoin’s supply is lower than on paper
On-chain analysts such as Woobull.com creator Willy Woo claim that the total supply of Bitcoin is less than is often thought.
While the total supply of Bitcoin is 21 million, there is a large number of lost or dormant BTCs that can no longer be accessed. Court She said:
“The total supply of Bitcoin will not be 21 million, it will be about 17 million dead coins in the struggle to be recognized as something valuable in the early days. That means 0.002 BTC per person on the planet.”
Therefore, PlanB expects Bitcoin to follow the S2F model as the available supply and the amount of new Bitcoin mined decreases over time.
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