Bitcoin course towards $100,000? – The Halving Factor

Where will the Bitcoin course go next? – Anyone who can solve this question with complete certainty will probably never have to work again. However, since none of us have a reliable glass ball at home, we may have to rely on other indicators and factors to best estimate the trend of the Bitcoin price.

 

In the short term, we can achieve this with the help of chart analysis. In the long run, however, it is more macroeconomic factors and fundamentals that determine the Bitcoin price. One of these relevant events is the Bitcoin Halving in May 2020. Today we are looking at the views of three very well known crypto analysts.

 

Bitcoin price of 100,000 dollars? – We are on track

We will first look at the bullish opinions and then devote ourselves to the bearish opinion. The bullish side is represented by PlanB and Mati Greenspan. PlanB as the ‘inventor’ of the Stock-to-Flow model is something like the godfather of halving. Mati Greenspan, for his part, is known as an analyst who has enormous expertise in both the classic financial and crypto markets.

 

On the first Advent, PlanB published a tweet that underlines his position as Bitcoin Bulle. The tweet he published once again refers to the stock-to-flow model. As a reminder: in the stock-to-flow model, we consider the ratio of the existing Bitcoin (=stock or supply) to the number of BTCs that come onto the market within a fixed period of time (=flow). This valuation model is largely used for precious metals and shows the scarcity of a good.

 

PlanB and the Stock-to-Flow Model

PlanB lets the numbers speak and shows with a graph that the current Bitcoin price movements run within the framework of the model. He counts the countdown and sees Bitcoin sliding in the direction of the 100,000 dollar.

One thing is certain: with the upcoming halving, the stock-to-flow will double. This is due to the fact that the existing supply remains the same, whereas the number of new BTCs is halved. So far, so good.

 

Let us now turn to Greenspan. One of the arguments, which is mentioned in part, is that halving is already priced in. After all, it is possible to predict in advance when it will take place. In my opinion, however, this argument is not valid, because then it could have been argued since the Genesis block that halving was priced in. After all, it takes place every 210,000 blocks. So if we assume an average block time of 10 minutes, we know in advance when the next halving will take place.

 

So it is often the case that a few months before the actual halving the Bitcoin course rises. This is mainly due to the expectation of many investors that the Bitcoin price will have to rise as part of the halving. However, weeks and months after the actual event, the actual effect comes into play: the halving of the block reward and thus the doubling of the mining costs. If we assume that there will not be a significant decline in the hashrate, the Bitcoin price must rise to compensate for the increased production costs of the miners.