Bitcoin corrected lower after hitting its record high of around $ 32,000, but it hasn’t stopped any analyst from making extravagant bullish calls.
One $ 100K bitcoin
PlanB, the inventor of stock-to-flow – a price prediction model often cited by Bitcoin aficionados – said on Sunday that the flagship cryptocurrency would hit $ 100,000 anytime between the second and third fiscal quarters of 2021. He based his bullish analogy on Bitcoin’s market performance after the so-called “halves”, a periodic event that halves the active supply.
“If the story is a guide and Bitcoin BTC continues its current development and could be anywhere between April and September 100,000 USD, “according to PlanB.
PlanB’s analysis is based on Bitcoin’s limited delivery cap of 21 million. If the rate of production slows down over time and demand increases at the same time, the likelihood of the cryptocurrency increasing increases. This serves as the basis for the analyst’s stock flow model, with BTC / USD trading at $ 288,000 by the end of this year.
So far, the model has proven to be accurate according to the projection curve specified by PlanB. The verifiable correctness has led many traders and analysts to cite it as a bullish background for Bitcoin.
Macro-investors and seasoned managers have concerns that Bitcoin’s price rally may eventually turn out to be a bubble.
After the dramatic rebound following the COVID-19 crash last March, the cryptocurrency plunged a series of record highs in the late fourth quarter of 2020 and early first quarter of 2021, rising more than 1,000 percent at one point in January. This has opened BTC / USD to bearish testing, and strategists believe its price has gone beyond its real value.
In his testimony to the Financial Times, the founder of Baupost Group, Seth Klarman, said that investors have a “wrong impression” of the long-term upward movement of Bitcoin and the stock markets. GMO co-founder Jeremy Grantham also warned of “extreme overvaluation” when he called the ongoing risk rally an “epic bubble”.
However, Bitcoin analysts are betting on Bitcoin’s sustainable growth, even if it encounters a hardcore bearish correction along the way.
The way it is presented is straightforward: the US dollar will depreciate as long as the US government expands its stimulus programs and the Federal Reserve continues to buy government bonds indefinitely. As a result, companies and investors sitting on huge piles of money want to diversify some of it into safe havens like gold and bitcoin.
“The United States is positioned for a period of huge spending and budget deficits when high inflation is almost guaranteed,” said William W. Nemirovsky, strategy analyst at River Financial.
“Currently, all parts of the US government support the price of Bitcoin and have given no indication that their positions will change in the near future,” he added.