Data Model Predicts Bitcoin Price Will Multiply 7X in Just Seven Months, Crypto Coins News

The price of bitcoin has been heading south over the past three months, but one quant analyst that goes by the name of PlanB on Medium predicts that the flagship cryptocurrency could surge in the coming days.

Bitcoin halving will send the price soaring

PlanB’s price model is based on the scarcity of the cryptocurrency. The analyst predicts that bitcoin will hit a market capitalization of $ 1 trillion after the next halving event occurs in May 2020, giving each token a valuation of $ 55, 000.

As things stand, 18 million tokens havealready been mined. This means that there are only 3 million bitcoin tokens remaining for mining. Adding to the scarcity is the belief that somewhere between 14% and 19% of all bitcoin mined has been lost or stolen.

Assuming that 15% of the 21 tokens that have been mined are compromised, only 18 million tokens of the cryptocurrency will be left in circulation. Dividing $ 1 trillion by this number gives us a price of $ 55, 555, which is close to what PlanB is modeling .

So, in just over seven months, the price of bitcoin could multiply seven-fold if the theory of scarcity holds true. But what has led PlanB to estimate that bitcoin could hit $ 1 trillion in market cap? The analyst says that bitcoin is the “first scarce digital object,” so it is akin to silver and gold.

This is why PlanB believes that people will shift their money from gold and silver to bitcoin. What’s more, PlanB adds that people in nations with negative interest rates or “predatory governments” will buy more of bitcoin in the future.

All of this will lead to increased demand for bitcoin and send the price of the cryptocurrency soaring.

Will it actually happen?

This is not the first time someone has equated bitcoin to gold and painteda fat price targeton the crypto asset.

Earlier this year, Mark Yusko of asset management firm Morgan Creek Digital predicted a $ 7.4 trillion market cap for bitcoin by equating it to gold. PlanB’s estimate is conservative in comparison. However, recent bitcoin price action suggests that the theory might be flawed after all.

Global economic uncertainty hasrubbed off positivelyon the price of gold. The yellow metal has seen a steady rise this year, and trades close to the $ 1, 500 an ounce mark after gaining around 15%. Bitcoin, on the other hand, has delivered far greater gains when compared to gold. Its price has more than doubled even after the recent crash.

The price of gold has risen while bitcoin has recently plunged as global economic uncertainties have taken hold. | Source: YCharts

But as bitcoin started plunging from the third week of June onwards, gold moved up. This indicates that gold is still the preferred choice for investors looking for a safe-haven asset when things start going south. So, PlanB’s price forecast after the next halving event depends on the demand for the cryptocurrency.

The current signalsdon ‘ t seem encouraging, as the launches of Bakkt futures and Binance US indicate that demand for the cryptocurrency might be lukewarm. That has to change if PlanB’s handsome price estimate is to become a reality.

This article was edited bySam Bourgi.

Last modified (UTC): October 21, 2019 17: 24

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