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PlanB, the creator of the stock-to-flow (S2F) model, reiterated on November 8 that Bitcoin (BTC) was on track to hit $ 100,000. The pseudonymous analyst expects the dominant cryptocurrency to hit the $ 100,000 to $ 288,000 range by December 2021.
Bitcoin is expected to rise by around 545% from the current price to exceed $ 100,000. At this price point, BTC’s market cap would be around $ 2 trillion, roughly the same as Apple, the world’s most valuable company.
Why $ 100,000 and more 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 consideration its fixed supply and halving the block reward, which reduces the rate at which new BTC is produced or “mined”.
The theory behind S2F is that as the supply of Bitcoin decreases over time, inflation would continually increase. These two factors could theoretically amplify the bullish trend of the first cryptocurrency.
Based on Bitcoin’s supply curve and halving cycles, S2F places BTC’s expected valuation at $ 5.5 trillion. The model predicts that Bitcoin will reach a valuation of several trillions of dollars before 2024. The model reads as follows:
“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 translates into a BTC price (considering 19 million BTC in 2020-2024) of $ 288,000. “
In a tweet, PlanB said it remains confident that the S2F model’s $ 100,000 price projection for Bitcoin will materialize.
2021 is particularly important for Bitcoin as it follows a much anticipated block reward halving in May 2020.
Six months ago, Bitcoin experienced its third halving in history. This halved the number of BTC mined each day, which would cause the circulating supply to drop over time. The analyst wrote:
“People ask me if I still believe in my role model. To be clear: I have no doubts that #bitcoin S2FX is correct and #bitcoin will type $ 100K-288K by December 2021. In fact, I have new data that confirms the supply shortage is real . IMO 2021 will be spectacular. No financial advice! “
So far, after the halving, Bitcoin has fallen from $ 8,700 to $ 15,500, recording a rally of 78.1% in six months.
Bitcoin’s supply is lower than that of paper
On-chain analysts like Willy Woo, the creator of Woobull.com, claim that the total supply of Bitcoin is lower than what is often thought.
While the total supply of Bitcoin is 21 million, there are a large number of lost or dormant BTCs that cannot be accessed anymore. Courting said:
“Bitcoin’s total supply will not be 21 million, it will be around 17 million, as many coins died in the struggle to be recognized as something 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 amount of new Bitcoin mined decreases over time.
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