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Why bitcoin could break $100K by 2022

06 Mar, 2020 3 min read
bitcoin charts

Bitcoin is already predicted to increase in value this year, but this could be just the beginning of a long-term climb to dizzying heights. According to renowned price PlanB, there are “more one hundred-plus events” indicating that BTC price will rise past to $100,000 next year.

PlanB’s projections are based on his stock-to-flow bitcoin price model, which the analyst says calls for a mid-term price tag of six figures. Furthermore, the bullish bitcoin pundit dismisses concerns about how quickly or slowly the bitcoin rise happens as “irrelevant.”

Stock to flow ratio, basically a measure of abundance is the amount of a commodity held in inventories divided by the amount produced annually. Gold traditionally has the highest stock to flow ratio of all commodities, hence its high price and value as a safe haven asset. Bitcoin is designed to be similar to gold in many ways. As new coins are mined, rewards diminish over time to ensure a finite amount of bitcoin in existence.

Co-integration is key

The mining rewards for bitcoin are scheduled to halve in May this year and PlanB’s prediction came out of a discussion of the possible effects that this will have on BTC/USD. The analyst has gone on record stating that he expects the halving event to result in a significant price boost for bitcoin, just as the 2012 and 2016 halvings have done.

One Twitter user challenged PlanB’s projection, drawing attention to the more gradual price rise we saw in 2016 compared to 2012. Which halving year would 2020 resemble?

“IMO that is not the right question to ask, because you cannot tell from only 2 events,” PlanB responded.

“Key thing is that you know from co-integration (100+ events) that btc will probably go over $100k before Dec 2021. How (slower/lower or faster/steeper) and exactly when is irrelevant.”

Co-integration is a term for the to correlation between the price of bitcoin and the stock-to-flow calculations. Throughout bitcoin’s existence, the two have been closely linked, rising together around halving events.

“S2F and btc price stay together,” explained PlanB. Assuming that this continues to be the case, stock-to-flow indicates that bitcoin price should rise up to $100,000, and stay there until around 2024, the next scheduled halving event.

Will price pump up pre-halving?

You don’t have to wait until the actual halving event in May to bet on bitcoin price rising. Bitcoin is, in fact, currently outperforming. The current price at the time of writing is $9,128, higher than the stock-to-flow average is around $8,650. Bitcoin climbing back up over $9,000 was boosted by swift gains totalling 4.3% in just 24 hours.

Bitcoin price chart at the time of writing

Bitcoin could be punching above its weight in the run-up towards the halving. Even analysts such as the notoriously conservative Tone Vays are finding reasons to act bullish in the short term.

In a summary of his latest Trading Bitcoin YouTube video, Vays commented on bitcoins recent gains leading up to the halving event. “$BTC price moves about $9,000 is a pretty bullish sign that another pre-having pump is very likely.”

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