Analysts are debating the position of Bitcoin in the cryptocurrency market. The developer of the Stock-to-Flow model, PlanB, discussed with his followers the dynamics of the currency's rise and fall. According to him, Bitcoin's prospects are quite productive. Despite the numerous price drops, its positions always return to the previous state and then go up.
Bitcoin's Prospects
Analyst PlanB talks about the prospects of BTC. Currently, the currency is rapidly declining, giving other, less known coins the opportunity to grow and become leaders in the TOP-10 rankings. Bitcoin holders are in confusion. They don't know what to do:
sell the once-popular coin;
wait for the right time to earn significantly more.
The model built by PlanB has shown some cracks. He himself began to doubt whether it will continue to work. Doubting when a system does not work perfectly is a normal human condition. But experts' forecasts still give hope that the world's most famous currency will not lose its leading positions for long. It will rise again.
However, for users who have actively sold Bitcoin and bought new leading coins, this jump will be a significant blow. Less demanded virtual money briefly rises to the top positions and then returns to the bottom of the list. This can lead to significant financial losses for investors.
According to Crypto News, particularly loyal Bitcoin users do not lose confidence that the currency will rise again. They are buying the currency at a low rate, significantly increasing their future profits. Experts agree with this. Bitcoin has experienced both a decline and a rise in its exchange rate. After a sharp drop, there was an equally sharp jump upwards. BTC not only regained its positions but also significantly increased them.
In the conditions of the pandemic, virtual currencies also stopped growing, but then the cryptocurrency market revived and started operating at the previous level. But will the PlanB analyst's model withstand the current situation? Or will it stop working altogether?
It is impossible to say this with 100% certainty, but there are positive trends. New investors are coming in to replace those who are leaving the exchange. This is why the market will not cease to exist, and Bitcoin will remain in demand.
The main indicator of when to say that the PlanB analyst's model is not working and is considered useless will be the position of Bitcoin at the $30,000 level for 2-3 months. That's when you can start panicking. But until then, there is no reason to declare the system imperfect.
Features of the Stock-to-Flow Model
Many believe that the model can only be considered not working when its effectiveness is tested over the years. But the founder thinks it's much simpler. His forecast is that Stock-to-Flow can be considered invalid if the price of Bitcoin does not reach $100,000 during the last months of 2021. To verify the analyst's words, you don't have to wait for several years. Everything will be decided in the next six months.
This statement pushed many investors not only not to sell but also to start actively buying Bitcoin. The conditions for buying are now maximally favorable - you can purchase the currency at a 50% discount.
The essence of the Stock-to-Flow model is that it considers Bitcoin a scarce asset. More resources go into its production, and the maximum supply is limited to 21 million coins. Bitcoin's price is influenced by halvings, which halve miner rewards when adding a new block to the blockchain. This is why Bitcoin's rate increase is predictable, regardless of how low this indicator has fallen.
Supporters of PlanB's analytical model consider the combination of properties as the main reason influencing the scarcity of digital resources. In the long term, there are clear signs that the currency will improve its positions and grow. Thus, by 2021, it is entirely realistic that its ratio to the dollar will be 1 to 100,000.
This will inevitably be facilitated by the constant increase in the ratio of reserves to growth. The price of Bitcoin at the end of December 2021 should reach $100,000. This keeps investors, supporters of the Stock-to-Flow model, and the analyst PlanB in suspense. Meanwhile, users have split into two camps: those who sell Bitcoin without hoping for its growth and those who try to buy as many coins as possible, hoping to get a higher profit by the New Year.
