Thursday, March 18, 2021

Bitcoin price would hit $ 288,000 this year, according to this metric

Key facts:
$ 288,000 would be the average price of bitcoin in this 4-year bull cycle.
The Stock-to-Flow model predicts one bitcoin over a million dollars by 2025.

In the middle of the bull market, the big question of the moment is what price bitcoin (BTC) will reach in the coming months. And for the creator of the Stock-to-Flow or Reserves vs. Flow prediction model, by December we could be seeing the main cryptocurrency around $ 288,000.

For the tweeter PlanB (@ 100trillionUSD), who created the aforementioned metric, bitcoin would be around $ 288,000 by the end of this year if the behavior it has had in previous cycles is maintained. According to his model, that figure would be the average price in this 4-year cycle, which barely exceeds 3 months today.

For the analyst, the price of the cryptocurrency must reach a new historical maximum (ATH) above that level and be around $ 290,000 by the end of this year, for the average that it predicts to be viable.

288 [thousand dollars] is the average for this 4-year cycle, so I assumed we should be somewhere close to that level in December of this year. Otherwise it will be difficult to maintain the 4-year average at 288 [thousand dollars]. That is the only reason I mention December 2021 frequently.

Plan B

The Reserves vs. Flow model is associated with the scarcity of an asset. In this case, it takes into account the cycle of every four years in which the emission of bitcoin decreases through the programmed mechanism of reduction of rewards to miners, the halving.

Until now, bitcoin's price behavior has remained fairly close to the Stock-to-Flow model, which gives the metric a status of recognition in the bitcoin environment for predicting price movements. In addition, this attachment to the model has helped to consolidate the vision that cryptocurrency is an appropriate tool as a store of value. For some, comparable to gold.

Passing the million dollars: the outlook for the next bull cycle

In addition to this prediction, other analysts are also pointing to a bitcoin price close to $ 300,000 during this bull market cycle. Willy Woo, also renowned for his use of metrics to analyze price movements, places bitcoin's next key level above $ 74,000.

However, Woo himself had already advanced his forecast for BTC exceeding $ 200,000 this year. And for now, both analysts seem to agree not only on that figure, but on considering USD 100,000 as an even conservative level for the near future.

While the near future looks promising, the metric developed by PlanB points to even higher levels for the next bitcoin bull cycle, with a possible price tag of over $ 1 million.

The arrival of those levels might seem exaggerated for the price of bitcoin. However, from the beginning of the network a future was envisioned with each BTC even reaching 10 million dollars.

Hal Finney, one of the first to collaborate with Satoshi Nakamoto in the birth of Bitcoin, considered a decade ago that this was the price that the cryptocurrency should reach "if it was successful." By becoming the dominant payment system in the world, bitcoin would have to reach the full value of the world's wealth, Finney said.

For now, bitcoin would have to go a long way to achieve that price. But so far, the cryptocurrency has only risen every time, in every bull cycle. Just 10 years ago, the few bitcoin enthusiasts in the world celebrated that every BTC reached the equivalent of the dollar.