PlanB, the creator of the stock-to-flow (S2F) model, confirmed on November 8 that Bitcoin (BTC) is close to the $ 100,000 mark. The fake analyst expects the dominant cryptocurrency to hit $ 100,000 to $ 288,000 by December 2021.
Bitcoin should increase about 545% from the current price to $ 100,000. At this price, the market value of BTC would be around $ 2 trillion, or roughly like Apple, the most valuable company in the world.
Why over $ 100,000 and why is 2021?
The S2F model attempts to predict the long-term trend of Bitcoin prices by evaluating supply. This is because it takes into account fixed supply and halves the block reward, which reduces the speed at which new BTC is either produced or “recovered”.
The theory behind S2F is that as the supply of bitcoin decreases over time, inflation will continue to rise. These two factors could theoretically amplify the bullish trend of the leading cryptocurrency.
Based on Bitcoin’s supply curve and half-cycles, S2F estimates a projected BTC valuation at $ 5.5 trillion. The model predicts that Bitcoin will reach several trillions of dollars in value by 2024. The model reads:
The S2FX model estimates the market value of the next stage / group of BTC (it will be BTC S2F56 in 2020-2024) at $ 5.5 trillion. This means that the price of BTC (based on 19 million BTC in 2020-2024) is $ 288K. ”
In a tweet, PlanB said it remains confident that Bitcoin’s $ 100,000 price prediction for the S2F model will materialize.
2021 is especially important for Bitcoin as it follows the long-awaited half of block rewards in May 2020.
Six months ago, Bitcoin experienced its third drop in half in history. This halved the amount of BTC extracted each day, which would decrease the supply in circulation over time. The analyst wrote:
“People ask if I believe in my model. To be clear: I have no doubt that #bitcoin S2FX is right, and that #bitcoin will spend $ 100-288,000 by December 2021. I already have new data to prove there is a shortage of supply. It will be IMO 2021. Impressive. Not financial advice! ”
So far, after cutting it in two, Bitcoin has risen from $ 8,700 to $ 15,500, posting a 78.1% increase in six months.
Bitcoin supply is lower than what is shown on paper
Network analysts such as Willie Wu, creator of Woobull.com, say the total supply of bitcoins is less than is often believed.
Although the total supply of bitcoins is 21 million, a large number of bitcoins are lost or inactive and can no longer be accessed. Woo sa:
“The total number of Bitcoins will not be 21 million, but about 17 million, as many currencies died in the struggle to be recognized as something of value in the early days. That means 0.002 BTC for every person on the planet.”
Consequently, PlanB expects Bitcoin to follow the S2F model as the supply available and the number of new bitcoins mined over time decrease.