Popular bitcoin analyst and creator of the Stock-to-Flow (S2F) model under the pseudonym PlanB, has reaffirmed his conviction in his model, stating that bitcoin will hit a $100,000 price before December 2021.
In a recent tweet, PlanB stated that he remains convinced in the price prediction for BTC made by his S2F model and expects that by the end of 2021, the cryptocurrency will be trading around a price range of $100,000 to $288,000.
He said, “People ask if I still believe in my model. To be clear: I have no doubt whatsoever that bitcoin S2FX is correct and bitcoin will tap $100K-288K before Dec2021. In fact, I have new data that confirms the supply shortage is real. IMO 2021 will be spectacular. Not financial advice!”
PlanB’s S2F model tries to predict bitcoin’s long-term price by carefully considering the digital currency’s supply. It takes note of the fixed supply of bitcoin in addition to the Bitcoin Halving that causes the reward of bitcoin miners to be cut into two and reduces the rate of mining new bitcoins.
According to the S2F model, the price of bitcoin can reach the $100,000 to $288,000 mark based on two factors: a decrease in the supply of bitcoin overtime and a continuous increase in inflation.
Thus, for bitcoin’s price to hit $288,000, it will need to have a market cap of $5.5 trillion. The S2F model, judging by the digital currency’s supply curve and its halving, predicts that bitcoin’s market cap would attain a multi-trillion-dollar value by 2024.
“S2FX model estimates a market value of the next BTC phase/cluster (BTC S2F will be 56 in 2020–2024) of $5.5T. This translates into a BTC price (given 19M BTC in 2020–2024) of $288K,” PlanB said.
Based on the S2F model predictions, 2021 will prove to be a very important year for bitcoin because it closely follows the third bitcoin block reward halving which took place just six months ago, in May 2020.
The halving had resulted in a decrease in the number of bitcoin mined daily and this will, in turn, result in a reduction of bitcoin supply in circulation over time. Bitcoin has witnessed a spectacular increase in price since the halving, moving from $8,700 to $15,500 within six months.