Since Bitcoin (BTC) hit $20,000 for the first time in December 2017, analysts have been wondering when the cryptocurrency will break its next big price milestone next. The closest round-number milestone from $20,000 is arguably $40,000 or $50,000.<\/p>\n
While $50,000 is 450% higher than the current price of just shy of $9,000, a model backtested to be quite accurate in the volatile crypto market suggests that Bitcoin will hit this auspicious price point in the middle of 2021. Here’s more on why.<\/p>\n
In Spring of last year, a user on Twitter named PlanB suddenly rose to notoriety within the cryptocurrency space when the analyst, later revealed to be a quant at a European institution, revealed a revolutionary Bitcoin price model.<\/a><\/p>\n The model, dubbed the stock-to-flow model, equated Bitcoin’s scarcity, derived from the above-ground supply divided by the rolling issuance of the coin, to the asset’s market cap. It determined, to a 95% R squared, that after the BTC block reward reduction in May 2020, a coin will have a fair value of anywhere between $55,000 to $100,000.<\/p>\n While Bitcoin will seemingly eventually achieve that price point due to the historical accuracy of the model, the model does not predict when the surge will occur.<\/p>\n GeertJancap, a Twitter user interested in disruptive technologies, recently tried to solve this mystery<\/a> of when should Bitcoin trade at parity with the stock-to-flow model.<\/p>\n He noted in a semi-crypto-viral tweet that per his transfer function model of Bitcoin’s price, BTC’s price will catch up to PlanB’s lofty model a year after the halving in the middle of 2021.<\/p>\n The model appears to model the bubbles \u00e1nd bear markets fairly well. It confirms a certain inertia of price reaction, so a lag \u00e1nd overshoot. Model would predict: Price will catch up with S2F ratio a year after the halving. And overshoot by ~ 2x. (3\/3) h\/t Tom! pic.twitter.com\/kWecmWgH5e<\/a><\/p>\n — GeertjanCap (@Geertjancap) January 15, 2020<\/a><\/p><\/blockquote>\n\n