Cryptocurrency analyst by the name PlanB has predicted that Bitcoin (BTC) price will reach $55,000 shortly after the May 2020 halving, stating that the price would be pushed by the likes of China, Venezeula, Iran and some other “predatory governments”.
The crypto expert in a medium post said halvings do have big impact on Stock-to-flow and value, and therefore predicted that the “market value for bitcoin after May 2020 halving is $1trn, which translates in a bitcoin price of $55,000”.
The analyst, who said quite a large number of individual ask where all the fund required for the $1trn Bitcoin market value would come from, the analyst pointed:
“The fund would come from silver, gold, countries with negative interest rate (Europe, Japan, US soon), countries with predatory governments (Venezuela, China, Iran, Turkey etc), billionaires and millionaires hedging against quantitative easing (QE), and institutional investors discovering the best performing asset of last 10 yrs.”
In his assertion, PlanB used stock-to-flow (SF) to model bitcoin’s value, stating that SF ratio has effects on price discovery going by historical data.
“The hypothesis in this study is that scarcity, as measured by [stock-to-flow], directly drives value,” Plan B said, stating further that the hypothesis uses SF as data input based on the power law formula (BTC = a*SF^b). Here, b is the fractal dimension used in predicting the probable price of BTC.
While the next Bitcoin halving is expected to come around May 2020, the idea will reduce the miner block reward from 12.5 to 6.25 BTC. The halving, no doubt, would reduce the supply of BTC in the crypto market, and expectantly, could have an impressive effect on the price of the digital asset and the crypto space at large. As noticed, the last halving took place in 2016. During the period, Bitcoin jumped to $20,000.
PlanB, who is aware of the possible effect of halving saying it’s “a constant factor,” added that “every halving, bitcoin [stock-to-flow] doubles and market value increases 10x”.
His prediction reflects that Bitcoin has the potential to reach $55,000 after the halving.
