Bitcoin Price Set to Multiply 7X in just Seven Months, Data Model Indicates

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by Wanguba Muriuki · 3 min read
Bitcoin Price Set to Multiply 7X in just Seven Months, Data Model Indicates
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One analyst, PlanB, is convinced that the Bitcoin price will surge by seven-fold in the next seven months to hit a market capitalization of $1 trillion.

Volatility always exists in the crypto markets. After Bitcoin reached its all-time highs in December 2017, what followed was a persistent bear market. However, the bearish trend seemed to have come to an end when Bitcoin surged from $3,500 to over $13,000 in a few months. The bulls lost momentum with the flagship cryptocurrency heading south over the past three months.

Although Bitcoin is struggling to stay above $8,000, one quant analyst called PlanB on Medium believes that the token will surge in the coming days.

Bitcoin Halving Will Make the Price Explode

The price model postulated by PlanB is majorly based on the scarcity of the cryptocurrency. The analyst is convinced that Bitcoin will hit a market capitalization of $1 trillion after the halving event scheduled for May 2020. That will give every token a valuation of $55,000. Currently, over 18 million tokens have already been mined.

Therefore, not more than 3 million bitcoin tokens remain for mining. In addition to this scarcity, there is a belief that up to 19% of all bitcoin mined may have been lost or stolen. Going by the assumption that 15% of the 21 million tokens that can be mined are compromised, it means that just 18 million tokens of bitcoin will be left in circulation.

Dividing $1 trillion by that number translates to a price of $55,555 per coin which is almost the same as what PlanB’s model is predicting. Hence, in the next seven months, the price of bitcoin could explode seven times if the scarcity theory holds.

Many are now wondering what led PlanB to believe that Bitcoin can hit a market cap of $1 trillion. The analyst states that BTC is the ‘first scarce digital object’ so it is comparable to silver and gold. Hence, the analyst is convinced that people will shift their money from gold and silver to Bitcoin.

Can it happen?

Coincidentally, it is not the first time that somebody has equated bitcoin to gold and predicted a huge price target on the crypto asset. Earlier in 2019, Mark Yusko attached to the asset management firm Morgan Creek Digital said that Bitcoin can reach a $7.4 trillion market cap just like gold. PlanB’s estimate of $1 trillion is therefore seen as conservative compared to Yusko’s prediction.

But the recent Bitcoin price action punches holes into the credibility of the scarcity theory. The global economic uncertainty has rubbed off positively on the price of gold. The precious metal has enjoyed a steady rise in 2019 and currently trades near the $1,500 level an ounce. That translates into a 15% gain for the year to date.

On the other hand, Bitcoin has offered significantly greater gains compared to gold. Its price has more than doubled this year even after the recent flash crash. Notably, as Bitcoin started diving from the third week of June, gold moved up. That proves gold is still the preferred solution for the investors seeking a safe-haven asset when things start dropping.

Thus, the price forecast made by PlanB after the next halving event is majorly related to the demand that will arise for the cryptocurrency. But, the current signals are not encouraging. The launches of Binance US and Bakkt futures show that demand for bitcoin might be lukewarm. That must change quickly if PlanB’s price estimate is to become a reality.

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Wanguba Muriuki

Wanguba Muriuki is a content crafter passionate about putting everything into writing. He is passionate about Blockchain and Traveling. He is also an experienced creative and technical writer. Everything and everyone has a story to tell. What better way to capture the real story than in words.

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