Bitcoin’s trajectory toward $100,000 is more real than ever, according to the data, but one opponent warns that the market is $11,000 overvalued.
Bitcoin enters the S2F price forecast and puts BTC target at $100,000 on the MARKET NEWS
Bitcoin (BTC) is accurately following the stock-to-flow model’s price predictions and investors aren’t waiting to make big profits on this high, says the famous quantitative analyst PlanB.
In a tweet on December 17th, the creator of the stock-to-flow pricing model noted that in its current cycle of halving, Bitcoin growth is going as planned.
BTC’s price reaches the $23,562 stock-to-flow model target
Despite this week’s enormous volatility, the stock-to-flow model remained remarkable in its ability to predict the pace of change in the Bitcoin price over long periods.
Critics have argued that Bitcoin cannot repeat its behaviour from the last bullish cycle – specifically 2017 – and the gains this time will be less pronounced, taking longer to materialise.
Comparing performance since May (the date of the third Bitcoin halving) with performance after the first and second halves of 2012 and 2017, this year could not be a more didactic result, Plan B says.
„REST IN PEACE. ‚Stretching cycles‘ and ‚diminishing returns‘,“ the analyst summed up by presenting a new chart.
Bitcoin post-halving price performance chart. Source: PlanB/ Twitter
Bitcoin’s rise above $23,000 allowed the asset to fill the empty space in the stock-to-flow model. Before that, just under $20,000, the BTC/USD was actually underperforming compared to the demands of the model.
As reported by the Cointelegraph, however, even in November, Bitcoin was already beating its performance since the 2016 halving.
The various Stock-to-flow assumptions that the price of Bitcoin is between $100,000 and $576,000 by the end of the current halving cycle, which will take place in 2024. BTC/USD reached exactly the daily forecast for the original model – $23,562 – on Thursday.
Bitcoin stock-to-flow model on December 17, 2020. Source: Digitalik
Erb: Bitcoin’s „fair price“ is $12,000
To the chagrin of critics, an increasing number of institutional investors are beginning to share this vision – and putting their money where their mouth is to prove it.
This week, One River Asset Management unveiled a plan to increase Bitcoin and Ether (ETH) exposure to more than $1 billion by early 2021. Guggenheim, who reserved the right to allocate part of his own capital to BTC, now says a fair value for Bitcoin is $400,000 – 1,600% higher than the historic high reached on Thursday.
Only a few new outliers indicate a downward trend. Among them is Claude Erb, the asset manager famous for writing „The Golden Dilemma“, a report that argues against the usefulness of the precious metal as a protection against unexpected inflation.
In a new article entitled „Bitcoin is just like gold, except when it’s not“, Erb produces a new price model vaguely linked to the network effect that gives a maximum theoretical value of $74,000 per Bitcoin.
„Bitcoin has no history of protection against inflation, value reserve and safe harbor,“ his summary says.
„The price of Bitcoin can be broken down into a questionable ‚bitcoin network‘ fair price and a fair price deviation. Both bitcoin and gold are about 50% above their ‚fair prices‘. ”