PlanB is revising its stock-to-flow model shortly before Bitcoin Halving 2020
PlanB a popular Twitter user was featured in the May 1 issue of the podcast with Peter McCormak, another crypto-influencer. There he described the path of the oldest cryptocurrency. He further said that Bitcoin may not even be an asset anymore, but something much larger. PlanB is convinced that the Bitcoin price will one day be around $1 million.
“This thing [#bitcoin] is not a toy anymore, and it’s maybe not an asset anymore as well. It is going to be much bigger than that.”
— PlanB (@100trillionUSD) May 2, 2020
The stock-to-flow model states that there is a connection between the hardness of an asset and its price. The hardness is calculated as follows: the amount conveyed/increase in one year.
Example Bitcoin: 18,359,500 coins are currently being funded. Each year, block reward * block per year = 12.5 * 6 * 24 * 365 = 657,000 BTC are added. So the hardness is ~ 28. The hardness increases linearly with the same delivery rate. With Bitcoin, the hardness also doubled by the Bitcoin Halving at once, because the delivery rate is halved.
PlanB shows in a logarithmic chart of the post how the market capitalization of Bitcoin has correlated with its hardness in the past. In the revised version, he draws the self-defined development stages of the cryptocurrency. In addition, he included gold and silver in the calculation of the regression line and was able to improve their accuracy and their degree of determination (R ^ 2).
Bitcoin Price to pump massively
The possibility of Bitcoin price to pump massively is high, reflecting the halving event that would help the assumption. As we know the fundamentals of the law of Supply and Demand, it is a point that the supply of Bitcoin would be decreased deeply and its influence in the position of Bitcoin is foreseeable. As the supply declines the more eminent the demand it would get so, every thought and perspicacity that tells you to stock or store Bitcoin is good before it is too late.
Every four years after mining of 210,000 blocks, the Bitcoin halving development occurs, wherein the amount of BTC created rewards to the miners will be halved, i.e, cut the current one by 2, which essentially will decrease from 12.5 to 6.25 BTC. Bitcoin halvings that have occurred before perpetually revealed far-reaching mountains, hence the equivalent is assumed of the upcoming one.
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