PlanB, the creator of the S2F model, is confident that the price of Bitcoin is on track to reach $100,000 by December 2021.
PlanB, the creator of the stock-to-flow (S2F) model, reiterated on November 8 that Bitcoin Trader is on track to reach $100,000. The analyst expects the dominant cryptomone to reach the $100,000 to $288,000 range by December 2021.
Bitcoin would have to increase by about 545% of the current price to exceed $100,000. At that price, BTC’s market capitalization would approach $2 trillion, or about the same as Apple, the world’s most valuable company.
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Bitcoin S2F model.
Why $100,000 + and why in 2021?
The S2F model tries to predict the long-term price trend of Bitcoin by evaluating its offer. That is, it takes into account your fixed supply and the halving of the block reward, which reduces the rate at which a new BTC is produced or „extracted“.
The theory behind S2F is that as the supply of Bitcoin decreases over time, inflation will continually increase. In theory, these two factors could amplify the upward trend of the main krypton currency.
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Based on the Bitcoin supply curve and halving cycles, S2F puts the expected valuation of BTC at $5.5 billion. The model predicts that Bitcoin will reach a valuation of several billion dollars by 2024. The model says:
„The S2FX model estimates a market value of the next BTC phase/group (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“.
In a tweet, PlanB said it remains confident that the $100,000 price projection for the S2F model for Bitcoin will materialize.
2021 is particularly important for Bitcoin because it follows the May 2020 block bounty halving.
Six months ago, Bitcoin experienced its third ever halving. This reduced the amount of BTC extracted each day by half, which would cause the circulating supply to drop over time. The analyst wrote:
„People ask me if I still believe in my model. To be clear: I have no doubt that #bitcoin S2FX is correct and #bitcoin will play $100K-288K before December 2021. In fact, I have new data that confirms that the shortage of supply is real. IMO 2021 will be spectacular. This is not financial advice!“
So far, after the halving, Bitcoin has risen from $8,700 to $15,500, registering a 78.1% rebound in six months.
Bitcoin supply is less than paper
Network analysts like the creator of Woobull.com, Willy Woo, say that the total supply of Bitcoin is lower than previously thought.
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While the total supply of Bitcoin is $21 million, there are a lot of lost or inactive BTCs that can no longer be accessed. Woo said:
„The total supply of Bitcoin won’t be 21 million, it will be around 17 million, since many coins died in the struggle to be recognized as valuable in the early days. This means 0.002 BTC per person on the planet.
As such, PlanB expects Bitcoin to follow the S2F model as the available supply and the amount of new Bitcoin extracted decreases over time.