PlanB, the creator of the stock-to-flow (S2F) model, reiterated on Nov. 8 that Bitcoin (BTC) is well on its way to hit $100,000. The pseudonymous analyst expects the dominant cryptocurrency to achieve the $100,000 to $288,000 range by December 2021.
Bitcoin would have to increase by around 545% from the current price to surpass $100,000. At that price point, the market capitalization of BTC would near $2 trillion, or roughly the same as Apple, the world’s most valuable company.
Why $100,000+ 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 the block reward halving, 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 and inflation would continuously rise. These two factors could theoretically amplify the uptrend of the top cryptocurrency.
Based on Bitcoin’s supply curve and the halving cycles, S2F puts the expected valuation of BTC at $5.5 trillion. The model predicts Bitcoin to reach a multi-trillion-dollar valuation before 2024. The model reads:
“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.”
In a tweet, PlanB said he remains confident the S2F model’s $100,000 price projection for Bitcoin would materialize.
2021 is particularly important for Bitcoin because it follows a highly anticipated block reward halving in May 2020.
Six months ago, Bitcoin experienced its third halving in history. This decreased the number of BTC mined each day by half, which would cause the circulating supply to drop over time. The analyst wrote:
“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…