Proximity to Bitcoin halving increases price analysis and speculation. Here is PlanB’s analysis.
Cryptocurrency analyst PlanB predicted that the price of bitcoin could rise tenfold after halving, as the event will “approve or break” its forecasting model.
The mode used by the popular analyst is the known stock-to-flow (S2F) model, which is a measure to predict the price of the cryptocurrency based on its existing offering and the number of new currencies being minted. Bitcoin’s S2F is available when compared to precious metals, such as gold, as new currencies enter the market at a fixed interval.
IMO #bitcoin 2020 halving will be like 2012 & 2016. As per S2F model I expect 10x price (order of magnitude, not precise) 1-2 yrs 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 pic.twitter.com/kiTdN0n3Lu
– PlanB (@ 100trillionUSD) April 16, 2020
“The halving of #bitcoin 2020 will be like that of 2012 and 2016. According to the S2F model, I expect a 10x price increase (order of magnitude, I don’t need it) 1-2 years after the event. The halving will be of the type “make-or-break”For the S2F model. I hope that half teaches us more about the underlying fundamentals and the effects of the network ”
After the cryptocurrency market crash on March 12, which saw the price of bitcoin drop by about 40%, the analyst said the model was still valid, despite the BTC crash remaining within reach.
PlanB predicted in February that the price of the cryptocurrency could “exceed” the $ 100,000 mark, while he believes the risk associated with it is “overestimated”.
It is worth mentioning that bitcoin halving will see block rewards on the cryptocurrency blockchain drop from 12.5 BTC to 6.25 BTC per block, which some analysts say will help its price increase because demand is maintained, while production is cut in half. Others argue that the price can barely change, since halving is already priced.
Notably, institutional investors are already entering the market, as the cryptocurrency manager at Grayscale Investments set a record in the first quarter of this year, with inflows of more than $ 500 million. About 88% of the funds, Grayscale said, came from institutional investors.