Quantitative analyst PlanB says he believes that his end-of-year price forecast for Bitcoin will be realized.
Speaking on the What Bitcoin Did podcast, PlanB says that he’s keeping faith in the stock-to-flow model he popularized in the cryptocurrency space.
The stock-to-flow model, typically used in valuing traditional assets, aims to predict price by measuring existing supply against production rate.
According to PlanB, Bitcoin will hit a six-figure price by the end of 2021.
“I never had any doubt. I still think it will be $100,000 end of year, minimum. And there’s lots of time. We’re at [$40,000] now. So that’s a 2.5x. We’ve done more in one or two months, historically. So it can be done. I’m very confident…
I still see people on the internet calling for $20,000 Bitcoin. I don’t think that’s going to happen.
[$100,000] by Christmas.”
PlanB also says that with a linear-regression-based model, in which the relationship between two variables is formed by applying a linear equation to the data, it is “easy” to determine when the stock-to-flow model becomes invalidated.
“It’s just a linear regression, right? So it’s very obvious when that regression is no longer valid…
[The stock-to-flow model] says we should go up with the stock-to-flow ratio that has gone up since the halving. So we’re sort of waiting for that. But when it stays down – so when we stay at 30, 20, 40 thousand dollars for a couple of years, for example, a couple of months – then it’s obvious that this linear regression line is no longer fitting the data.
It is very easy to see when it’s invalidated. And people can do that themselves.”
ICheck Price Action
Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/acharyahargreaves