Bitcoin (BTC) is still on track to reach $55,000 according to the recognized analyst PlanB. This comes after a recent drop in the price of the leading cryptocurrency from over $8,100 to below $7,000 for a brief period of time.
Bitcoin Has Place To Keep Growing
PlanB is a recognized cryptocurrency analyst that has been working with the Stock-to-Flow model with Bitcoin.
According to him, this model predicts a Bitcoin market value of $1 trillion after the next halving in May 2020. This would allow Bitcoin to reach $55,000.
"The model predicts a bitcoin market value of $1trn after next halving in May 2020, which translates in a bitcoin price of $55,000."https://t.co/n5P5uMCKHT
— PlanB (@100trillionUSD) March 26, 2019
Although this is his current prediction, Bitcoin fell below $7,000 for a short period of time a few days ago. This move shacked out the market and many enthusiasts became more bearish than before.
Nonetheless, PlanB released a tweet in which he explained that this is just a normal market behaviour pre-halving and that there is nothing out of the ordinary.
On the matter, he commented:
“Some people panicking about this -17% week. It’s just normal Bitcoin behaviour. Note we are still up 2x YTD. And yes, S2F model is just fine, nothing out of the ordinary.”
This allowed him to confirm that we are still heading to a Bitcoin price of at least $55,000 after the halving event next year.
Moreover, Jason A. Williams, co-founder and Partner at Morgan Creek Digital, shared the same price prediction made by PlanB last month. He reminded users that the halving is getting closer.
Bitcoin is going to reduce its reward for miners as soon as in May 2020. That means that miners will be rewarded 6.25 BTC rather than 12.5 BTC as they are currently receiving.
Some people panicking about this -17% week.
It's just normal #bitcoin behavior. Note we are still up 2x YTD. And yes, S2F model is just fine, nothing out of the ordinary. https://t.co/eTL0ITnn27 pic.twitter.com/iPAkYGAA4d
— PlanB (@100trillionUSD) November 22, 2019
This is especially bullish. If the demand for the cryptocurrency increases, the lower new issuance of BTC would have a positive impact on the price of Bitcoin in the long term.
With past halvings, Bitcoin experienced a bull run after the reward reduction took place. However, the reward reduction for miners does not necessarily have an immediate price effect on Bitcoin considering that miners will have to sell almost all their BTC to the market unless the price of the digital asset grows.
Finally, if the demand for Bitcoin surges after the halving, it is expected for the price of BTC to react in a very bullish way.