The quantitative analyst PlanB believes that its price forecast for Bitcoin will be realized by the end of the year.
On the What Bitcoin Did podcast, PlanB says it is sticking to the stock-to-flow model that it popularized in the cryptocurrency space.
The stock-to-flow model, typically used in valuing traditional assets, aims to predict price by measuring the available supply against the rate of production.
According to PlanB, Bitcoin will reach a six-digit price by the end of 2021.
“I never had a doubt. I still think it’ll be at least $ 100,000 by the end of the year. And there is a lot of time. Were at [$40,000] now. So that’s 2.5x. Historically, we’ve done more in a month or two. So it can be done. I am very confident…
I still see people on the internet asking for $ 20,000 bitcoin. I don’t think that’s going to happen.
[$100,000] until Christmas. “
PlanB also says that with a linear regression-based model, where the relationship between two variables is established by applying a linear equation to the data, it is “easy” to determine when the stock-to-flow model becomes invalid .
“It’s just a linear regression, right? So it is very obvious when this regression is no longer valid …
[The stock-to-flow model] says that we should go up with the stock-to-flow ratio, which has increased since the halving. So we’re kind of waiting for it. But if it stays down – that is, if we stay at $ 30,000, $ 40,000 for a couple of years, say a couple of months – then it’s obvious that this linear regression line doesn’t fit the data anymore.
It’s very easy to see when it’s invalid. And people can do that themselves. “
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