Bitcoin (BTC), the largest and most popular cryptocurrency in the world could reach an astonishing price of $50,000 after the halving event that is expected to take place in May 2020. This is according to the recognized cryptocurrency analyst PlanB, who makes analysis based on the stock-to-flow model (S2F).
Could Bitcoin Reach $50,000?
400;”>Bitcoin is going to be halving in the near future. Indeed, the cryptocurrency is expected to reduce rewards for miners by 50%, something that takes place every 210,000 blocks, close to four years. This is one of the most important characteristics of the cryptocurrency, which became known for having a reward-reduction model.
With a lower issuance of BTC, there are going to be fewer digital currencies available if demand increases. That means that the price could eventually experience a faster increase if demand suddenly spikes.
PlanB explained on Twitter that he has recently updated his model to have a more conservative prediction this year. He mentioned he used the original formula adding monthly data and a lower halving prediction. The conservative price prediction is currently $50,000 while the aggressive Bitcoin price prediction post-halving is currently $100,000.
On the matter, he commented:
“Good eye. Yes I used the original formula btc=0.4*sf^3 fitted on monthly data, with lower 2020-halving prediction ($50k). My personal favorite formula is btc=0.18*sf^3.3 fitted on yearly Oct data, with higher prediction ($100k). A matter of taste IMO: conservative or aggressive.”
In a previous Tweet, he stated that halving is priced in correctly and markets are efficient. At the moment, he considers that the number of traders and enthusiasts that understand and know the S2F model represent just 10 of the market.
Bitcoin has reached its all-time high in December 2017 when it was traded close to $20,000. Although this lasted a short period of time, many traders purchased and sold Bitcoin close to this value. Since then, Bitcoin fell to a low of $3,200 and it is now traded around $7,150 with a valuation of $8.27 billion.
That means that Bitcoin would have to grow by almost 600% if it wants to reach $50,000. This is certainly possible considering Bitcoin grew from $3,200 to $13,750 in just 6 months, representing an increase of 329.6%. Bitcoin’s halving is expected to take place on May 13 this year.