The controversial analyst who first applied the stock-to-flow ratio to Bitcoin (BTC) is updating his forecast for the leading cryptocurrency.
The pseudonymous analyst known in the industry as PlanB says he expects the upcoming halving event in May, which will reduce the new supply of BTC by half, will trigger a substantial rise in the price over the next one to two years.
He says Bitcoin’s next halving will determine whether the stock-to-flow model, which is used to measure how the scarcity of an asset relates to its price, is on point or a complete flop. If BTC doesn’t hit $70,000 by May of 2022, he says the model will be invalidated.
“[The] 2020 halving will be like 2012 and 2016. As per S2F model, I expect 10x price (order of magnitude, not precise) 1-2 years after the halving. Halving will be make-or-break for S2F model. I hope this halving will teach us more about underlying fundamentals & network effects…
$55k was the original model based on btc market cap. Later models, with newer data and other lost coin adjustment or yearly instead of monthly data, had different values, $70-100k.”
PlanB recently polled his 87,000 followers on Twitter, asking what they believe is the biggest risk to Bitcoin over the next year. The vast majority say it’s the economic aftermath of the coronavirus pandemic, which has claimed over 170,000 lives, rattled markets, shattered businesses and wiped out jobs.
What is the biggest risk for bitcoin next 12 months?
1) Halving, miner capitulation, miners selling
2) Futures, manipulation, naked short selling
3) Corona virus impact, correlation with stock market
4) MtGox trustee or PlusToken scammers selling
— PlanB (@100trillionUSD) April 15, 2020
The analyst says he’s not surprised that BTC has been highly correlated with traditional markets since mid-March, but he’s less worried about a long-term correlation.
“During crisis everything is correlated. What’s next is what’s interesting. They will not be correlated forever in my opinion.”