The value of bitcoin (BTC) has fallen after hitting $30,000 recently. However, these trends do not dampen the predictions of the explosion of its courses. Some believe the asset could be worth at least twice its current price within a year. Here is what bases their predictions.
Multiplication of the price of BTC by two, following the S2F model
After hitting the $30,000 mark, the valuation of bitcoin (BTC) has fallen significantly in recent days. The unit of the flagship crypto is worth around $27,600 currently.
Nothing alarming for PlanB, a pseudonymous crypto analyst. This one thinks that within a year, bitcoin should worth at least $60,000. This figure is obviously a multiplication by 2 of the recent level reached by the BTC.
Its projections are based on the stock-to-flow (S2F) model. This is an economic theory that PlanB applies to bitcoin. According to the precepts of the latter, there would be a relationship between the quantities of BTC currently available on the market, and those created each year.
The correlation between these two stocks would be the basis of the scarcity of bitcoin. A situation which, itself, would influence the increase in value of the queen of cryptos. A priori, his theory could be defended, given that the rarer an asset, the more valuable it is considered. As a result, its prices are skyrocketing.
From this point of view, PlanB’s forecasts of a doubling of bitcoin prices could be tenable. Except to consider that his analysis is not really unanimous within the community of crypto analysts.
Despite its relevance, the S2F model is indeed the subject of several criticisms. Some have felt that this theory notably lacks precision. It is true that during the first years of its existence, the method showed its predictive effectiveness.
However, it appears to have run out of steam recently, as recent projections based on this theory have failed miserably. For example, PlanB had predicted that bitcoin would surpass a six-digit valuation by the end of 2022. The crypto community is still waiting for this prophecy to come true!
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