According to PlanB, a widely followed quantitative analyst, Bitcoin (BTC) will likely experience explosive growth leading up to next year’s halving event. The 1.8 million Twitter followers of the pseudonymous quant analyst believe Bitcoin will follow the stock-to-flow (S2F) model and soar more than 588% from its current value of $29,069 to $200,000.
According to PlanB, Bitcoin’s scheduled halving in April 2024, which will cut BTC miners’ rewards in half, will be the catalyst for the king cryptocurrency to reach new all-time highs.
“The 2024 halving cycle will be very interesting.” Alternatively, 2022 was an outlier, and 2023 and later will revert to the S2F model line. Alternatively, a non-linear relationship between S2F/halving and price results in a diminishing return. 2022 was, in my opinion, an outlier, and exponential growth will continue until 50% adoption. “Only time will tell.”
Traders have traditionally used the S2F model to forecast commodity price movements such as gold and silver. The model forecasts an asset’s performance based on the theory that the price rises as the asset becomes scarcer.
PlanB also predicts that Bitcoin’s value will rise as the digital asset becomes more widely used. He believes there are only one million individual Bitcoin holders, even though there are 56 million fiat millionaires worldwide.
“People who hold paper bitcoin on exchanges do not count as hodlers (they are more traders).” So, when it comes to people who have real on-chain Bitcoin, there are only 3.5 million BTC addresses with more than 0.1 BTC on them… “Because many hodlers have multiple addresses, that number probably converts to 1 million hodlers.” 56 million fiat millionaires worldwide, 1 million Bitcoin addresses with more than 1 BTC. We arrived early.”
In support of Bitcoin’s growth, the quant analyst points out that when liquidity is injected into the markets, Bitcoin outperforms assets such as gold and stocks. “Global liquidity (particularly central bank money printing following the 2008 Global Financial Crisis and the [Covid 19 stimulus checks]) is the tide that lifts all boats.” However, some boats were lifted much higher!