Bitcoin Price Prediction Model “Intact” Despite Under $ 100k

A prominent bitcoin price model that accurately predicted the 2020/21 bullish streak remains “intact,” according to its creator, even though the cryptocurrency missed its December 2021 target of $ 100,000.

The stock-to-flow (S2F) model, created by the Dutch analyst under the pseudonym PlanB, posits that long-term market movements are dictated by the inherent scarcity of bitcoin. There will only be 21 million bitcoins and the rewards for mining cryptocurrency, the process by which bitcoin is created, are cut in half roughly every four years.

By dividing the supply (stock) of bitcoin by its production (flow), the S2F model predicts that the cryptocurrency will see higher and higher price spikes midway through each four-year cycle, a pattern that was followed in 2013, 2017 and 2021.

Bitcoin reached a new all-time high near $ 69,000 in November, more than three times higher than its 2017 peak, but has since fallen again and is now hovering around $ 50,000. This is a far cry from PlanB’s six-figure prediction, but the analyst claims that the current price still remains within the lower bands of the projected S2F range and could see new highs in 2022.

“The key is that BTC [bitcoin] at US $ 51k it is still within a standard deviation band of the S2F model [aproximadamente US$50k – US$200k]”wrote PlanB on Twitter.” If BTC remains within the $ 1 band for the next 5 years, then the S2F model is still valid and indeed useful to me. “

“It was not prudent to give a punctual estimate and [yo] I should have stuck with the range estimate. But I guess that’s what some people don’t understand: hitting US $ 100k would have been fine, but within the range of US $ 50-200k it’s all good. “

The accuracy of PlanB’s forecasts over the past 18 months has earned it more than 1.5 million followers on Twitter during that time, although some seem to question whether the failure to see spectacular gains in the final months of 2021 means that the S2F model is no longer valid.

“You know a model is no good when you need to make three to four more models if it fails,” wrote one user in response to PlanB’s justification that S2F is a range prediction, not a point estimate. Another of his followers shared a gif where they moved a goal.

Several crypto market experts contacted by The Independent They recently predicted that Bitcoin is on track to reach and surpass $ 100,000 in 2022, given the growing mainstream adoption and increasing institutional investment in the cryptocurrency.

Others warned that the economic uncertainty brought on by the latest spike in covid-19 cases and subsequent restrictions could see the price of Bitcoin continue to decline into the new year.

“In the early parts of 2022, cryptocurrencies could be seen struggling amid concerns about the broader macroeconomic context, with COVID-related uncertainty and inflation remaining high, and central banks are unsure whether to be aggressive. to fight inflation or remain patient, “said Alexey Kirienko, CEO of investment firm Exante.

PlanB has warned multiple times that geopolitical crises and other so-called black swans events could derail its S2F model.

“All these forecasts can be destroyed by a black swan event,” he told The Independent in September. “What [una] bitcoin ban, covid escalation [o] the war with China ”.

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Bitcoin Price Prediction Model “Intact” Despite Under $ 100k

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