PlanB, the creator of the stock-to-flow (S2F) pattern, reiterated on Nov. 8 that Bitcoin (BTC) is on its way to reaching $ 100,000. The moniker expects the dominant cryptocurrency to reach a range of $ 100,000 to $ 288,000 by December 2021.
Bitcoin will have to rise around 545% from current prices to surpass $ 100,000. At that price point, BTC’s market cap would reach close to $ 2 trillion, or close to that of Apple, the world’s most valuable company.
Why $ 100,000 + and why 2021?
The S2F pattern attempts to predict Bitcoin’s long-term price trend by evaluating its supply. Specifically, it considers a fixed supply and halves the block reward, which slows down the rate at which new BTC is produced or “mined”.
The theory behind S2F is when the Bitcoin supply decreases over time and inflation will continue to increase. These two factors could theoretically amplify the top cryptocurrency’s uptrend.
Based on Bitcoin’s supply curve and halving cycles, S2F gives BTC an expected valuation of $ 5.5 trillion. The model predicts that Bitcoin will reach a multi-trillion dollar valuation by 2024. The model says:
“The S2FX model estimates the market value of the next BTC phase / cluster (BTC S2F will be 56 in 2020–2024) to be $ 5.5T. This translates into a price of BTC (with 19 million BTC in the period 2020–2024) of $ 288k. “
In a tweet, PlanB said he still believes the $ 100,000 price prediction of the S2F model for Bitcoin will come true.
The year 2021 is particularly important for Bitcoin as it follows the highly anticipated block reward halving in May 2020.
Six months ago, Bitcoin experienced a third half in history. This reduces the amount of BTC mined per day by half, which will cause the circulating supply to decrease over time. The analyst wrote:
“People asked me if I still believe in my role model. To be clearer: I have no doubts that #bitcoin S2FX is correct and #bitcoin will hit 100K-288K USD by December 2021. In fact, I have new data confirming the supply shortfall is yes real. IMO 2021 will be very spectacular. Not financial advice! “
So far, after halving, Bitcoin has risen from $ 8,700 to $ 15,500, recording a 78.1% increase in six months.
Bitcoin’s supply is lower on paper
On-chain analysts such as Willy Woo, the founder of Woobull.com, say that the total Bitcoin supply is lower than people think.
While the total Bitcoin supply is 21 million, there is a large amount of BTC lost or inactive that is no longer inaccessible. Woo said:
“The total Bitcoin supply will not be 21 million, it will be around 17 million as many coins died in the fight to be recognized as valuable in the early days. This means 0.002 BTC per person on the planet.
Therefore, PlanB expects Bitcoin to follow the S2F pattern as supply becomes available and the amount of new Bitcoin mined gradually decreases over time.