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 So it’s very obvious when that regression is no longer valid…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.”
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The post PlanB Maintains $100K Bitcoin Prediction, Reveals When His Model Would Be Invalidated appeared first on The Daily Hodl.
