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Why A “Boring” Bitcoin Could Be A Good Thing

The current bitcoin trend can be described as “boring” by a lot of folks in the market. However, it is good to look at what this would mean in a space like the crypto industry that is used to fast-moving prices and quick-changing momentum. While the word “boring” may sound bad to investors who are used to these characteristics, Director of Global Macro at Fidelity, Jurrien Timmer, explains why this could inherently be a good thing for the digital asset.

Draw In Institutional Investors

The need for institutional investors in bitcoin cannot be overstated. For the digital asset to get to some of the forecasted values, institutional investors moving into the market has become a necessity. But will these institutional investors want to move into a highly unpredictable asset such as bitcoin?

Related Reading | Halfway To The Halving: What This Means For Bitcoin

In his recent Twitter thread, Timmer explained that a “boring” bitcoin is important if institutional adoption is to be expected. Pointing to the S2F model created by the infamous Plan B, he explains that bitcoin has closely followed this model. However, there is a deviation that is starting to take place.

The Director explained that instead of continuing to track the S2F model, BTC had instead started to follow the pink line which marked demand in the chart shared. This meant that as effective as Plan B’s model has been in the past, it seems bitcoin is cutting out a new trend for itself and that is now entirely driven by the demand. 

“So, in a more efficient two-way market, Bitcoin should deviate around that pink line, up and to the right,” Timmer explained.

BTC sticking close to pink demand line | Source: Twitter
Bitcoin Behaving Like A Traditional Asset

Now, one of the great gospels of bitcoin is how different the digital asset is from traditional risk assets. Nevertheless, as more time has passed and adoption is growing, it is beginning to behave more like a traditional risk asset. As more understanding comes, the investors who are purchasing the asset move from simply a price standpoint and move towards more efficient accumulation.

Timmer notes in his Twitter thread that institutional investors have likely come up with their own models which will help them know when a good time to buy bitcoin is. This could help them map out if they can get a 1.5x or 3x return from buying at a particular price.

BTC trading in the mid-$42,000s | Source: BTCUSD on TradingView.com

“For instance, If the demand model says that Bitcoin’s intrinsic value is $50k today and $100k two years from now (my thesis), then at $30k Bitcoin is going to look a lot better than at $70k,” he noted. Adding that “Price is what you pay but value is what you get.”

Related Reading | How Bitcoin Futures Premiums Exhibit Signs Of Market Exhaustion

Timmer closes out his thread explaining that getting the demand curve right would be very important “If indeed price starts to move more closely around an upwardly sloping demand curve.”

Featured image from MarketWatch, chart from TradingView.com

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Bitcoin S2F Creator PlanB Thinks BTC Will Reach $135k By December

Creator of the popular Bitcoin price prediction chart “stock-to-flow”, PlanB, puts $135k target for BTC by December 2021.

What Is The Bitcoin Stock-To-Flow Model?

The BTC stock-to-flow (S2F in short) method is a price prediction model popularized by PlanB. S2F is based on the ratio between the stock (current supply) and the flow (annual production).

It’s often thought that PlanB is the creator of the S2F model itself, however, that isn’t the case. The method has been used in the past for other assets like gold and silver, but PlanB was the first to implement it for Bitcoin. In this way, PlanB is the creator of the Bitcoin S2F chart, although not the core concept itself.

The stock-to-flow value of an asset like BTC shows how scarce it is. The model relates this value with the price and gives a prediction based on that.

Here is the latest price chart based on the S2F model for BTC:

Bitcoin price according to the S2F model | Source: buybitcoinworldwide

As is visible in the above chart, the method has been remarkably close to the real thing in its predictions. Although there have been a few points of deviation, the price has always eventually aligned back on the curve.

Related Reading | Bitcoin Jumps 10% In 24 Hours, Dead Cat Bounce Or Real Move Ahead?

PlanB Thinks BTC Could Reach $135k By December

At the start of the month, PlanB listed out their Bitcoin targets in a Tweet. Earlier, the analyst had targets of above $47k for August and above $43k for September, both of which the tweet confirms have been met.

Next targets for the S2F popularizer include more than $63k for October, above $98k for November, and finally at least $135k for December.

According to the S2F model, Bitcoin should reach $100k by December and these targets seem to be in line with that.

Reaching $100k by December will be a make or break moment for the famed price prediction model as the month is only a couple of months away now. At the moment, BTC’s price floats around $47.6k, up 10% in the last seven days.

Related Reading | TA: Bitcoin Turns Green, Why BTC Could Soon Breach $50K

Here is a chart showing the trend in the price of BTC over the last five days:

BTC’s price seems to have flattened in the last few days after a sharp move up | Source: BTCUSD on TradingView

Bitcoin volatility had seemed to have made a return over the last few weeks as the price showed a lot of chaotic movements over the month of September.

But the coin’s value has again flattened now and it’s unclear when a move in either direction will happen. Though if the S2F model is anything to go by, a move up will need to happen soon.

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PlanB: S2F Model Predicts Bitcoin To Break $100k By Christmas

PlanB, the popularizer behind the Bitcoin S2F method, says the model predicts BTC will break $100k by this Christmas.

The Bitcoin Stock-To-Flow Model

According to PlanB on Twitter, the BTC stock-to-flow (or S2F in short) model predicts that the cryptocurrency is on its way to break $100k by Christmas.

The S2F model is a method to predict the price of an asset based on the ratio of the stock (supply) to the flow (annual production).

PlanB is commonly known as the originator of the model, which is, however, not true. The method was already used for other assets like gold or silver before the analyst only popularized it for Bitcoin.

The S2F value of an asset can show how scarce the commodity is. The model uses a formula to relate that value with the price of the asset, which in this case is BTC.

Related Reading | Ethereum Issuance Drops Below Bitcoin’s For the First Time, Why This May Lead to a New Rally

Now, here is a chart that shows the trend of BTC’s price vs what’s predicted by the model:

Along with the S2F model, the Time Model is also depicted | Source: PlanB

As the above graph shows, the Bitcoin price as predicted by the model seems to be remarkably close to the real thing so far.

There are a few points of deviation, but the overall trend seems to be quite similar. Now, if the price follows the pattern going forward, BTC’s value should go up soon, reaching over $100k by Christmas.

Related Reading | Stablecoins Reserve Hits A New ATH, What Does It Mean For Bitcoin’s Price?

Besides the S2F model, there is also the curve for the Time Model in the chart. This “Time Model” is a method that takes into account diminishing returns and lengthening cycles while predicting the price.

According to this other model, the price should be around $30k by Christmas. PlanB, however, believes that this method underestimates Bitcoin’s value, and the S2F model is more accurate.

BTC’s Price

At the time of writing, Bitcoin’s price floats around $47.8k, down 4% in the last 7 days. Over the past month, the cryptocurrency has increased 14% in price.

The below chart shows the trend in the coin’s value over the last three months.

BTC’s price catches a downtrend | Source: BTCUSD on TradingView

After breaking above the $49k price mark again yesterday, Bitcoin has started to sharply fall down. It looks like the cryptocurrency is in a range market right now as the coin’s price continues to swing between $45k-$50k.

It’s unclear where BTC might head next, but if the S2F model holds any weight, the crypto might be moving big soon in order to reach $100k by Christmas.

Featured image from Unsplash.com, charts from PlanBTC.com, TradingView.com

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S2F Creator Beckons Beginning Of Second Leg Of Bitcoin Bull Run

PlanB, the popularizer of the Bitcoin stock-to-flow (S2F) model, says the current bull run still has a second leg remaining.

PlanB “Awaiting” The Second Leg Of This Bitcoin Bull Market

According to PlanB on Twitter, the S2F and S2FX models predict a second leg in the current bull run that will bring new highs for BTC.

As the name may suggest, the Bitcoin S2F or stock-to-flow model is based on the ratio between the stock (supply) and the flow (supply).

The model is actually a general one, meaning it can be applied on any commodity. Higher the S2F value, more scarce is the asset.

The method has been popularly used for precious metals like gold and silver, while PlanB applied it to Bitcoin. Here is how the current S2F price chart for BTC looks like:

The price as predicted by the Bitcoin S2F model | Source: buybitcoinworldwide.com

As the graph shows, BTC’s price seems to be treading remarkably close to the line predicted by the S2F model. There are certain regions of deviations, but the overall trend seems to be intact nonetheless.

Related Reading | A Generational Bitcoin Buy Signal Is Almost Back

Below is the chart that PlanB posted today. It shows BTC’s trajectory after the 2012, 2016, and 2020 halving.

Red indicates the current 2020 bull run | Source: PlanB

The two green lines in the chart show the price targets as predicted by the S2F and S2FX models. The S2FX model is a slight modification of the original S2F method.

As the above chart shows, both the rallies after a halving in 2012 (cyan) and 2016 (blue) seem to follow a specific pattern. The peak seems to have shifted later for the 2016 run as compared to the 2012 one.

Related Reading | Bitcoin Accumulation Patterns Shows Rally Might Only Be In Its Early Stages

If there is indeed a pattern here, the current bull run isn’t over and a peak is yet to be reached. Since the time period between the halving and the peak seems to be only going up, the current one will still take a while longer to reach it. This is the “second leg” PlanB awaits.

BTC Price

At the time of writing, Bitcoin’s price is just under $36k, up 15% in the last 7 days. Here is a chart that shows the trend in the coin’s value over the past 3 months:

BTC’s price shoots up | Source: BTCUSD on TradingView

Bitcoin has continued to move up over the weekend as the coin breaks above $45k for the first time since 16 May. It’s unclear whether the crypto can retain the trend and keep pushing forward, or if it would hit another resistance wall and slip back down.

If the S2F pattern indeed holds, then perhaps BTC is headed towards a bull run right now. A related S2F indicator also suggests the coin will move on a tear now that it has touched an important trend line.