Bitcoin Price: Crypto May Rise Again As ‘Accurate’ Predictive Model On ‘Midway Dip’ | points out City & Economy | Finances

The “stock-to-flow” model, which is based on the relationship between annual production of new bitcoins and existing inventory, suggests that a “halve” event occurs roughly every four years, which is usually followed by an increase. In 2012, after the first halving event, the price of Bitcoin rose from $ 11 to $ 1,100, and in a second halving event in 2016, it rose again from $ 500 to $ 20,000.

As the name suggests, if there is a halving event, the rewards for miners drop by 50 percent, which means that when the third halving occurred last year, the rewards for miners dropped from 12.5 to 6.25 Bitcoin.

The Netherlands-based analyst ‘PlanB’ suggests that Bitcoin’s recent price drop, where it fell from an all-time high, means it could only trade at part of its next big high.

In examining the predictive model, analysts believe that assuming that patterns from previous years repeat themselves, Bitcoin will experience a “midway dip”.

PlanB previously predicted that after the Bitcoin price drop in March 2020, the world’s most popular cryptocurrency will revive and hit $ 100,000 sometime in 2021.

However, a revised model suggests that the price of Bitcoin could soar to around $ 228,000 this year.

In a tweet, PlanB said that halving 2020 “looks like the half-way slump that we saw in 2012 and 2017 as well.”

Konstantin Anissimov, Executive Director at CEX.IO in London, told The Independent: “The stock-to-flow model foresaw the future price development of Bitcoin as a direct result of the supply shock after each halving.

“Based on this fundamental indicator, the scarcity of Bitcoin has a strong correlation with the value of the network.

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“With the cryptocurrency production rate plummeting to 328,500 new tokens per year last August, such a significant decrease had a serious impact on prices.”

PlanB stated that “regulation, hacks and other news” are affecting the price of Bitcoin, but the driving factor is scarcity. The more the scarcity of Bitcoin increases, the more the price increases.

Dr. Saifedean Ammous, author and economist, also saw similarities between the Bitcoin price drop and previous halving events.

In a tweet in response to the recent decline, he said, “More than two years after this model was released, the price continues to track the model’s predictions with amazing accuracy.”

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Another analyst compared the price hike in 2013 and 2017 with this year’s numbers and tweeted: “This is starting to be scary.”