Is Bitcoin on its way to a six-digit price tag? At least the creator of the stock-to-flow model believes so, as the asset’s 2020 performance has resembled the events after the previous halving.
Bitcoin is following the plan like “clockwork” after the third halving, said the creator of the popular stock-to-flow model.
He also reaffirmed his belief that the S2FX model is correct, and BTC will trade between $100,000 and $288,000 per coin by the end of 2021.
BTC Moving Like Clockwork
The stock-to-flow model and its variations are among the most popular BTC price prediction tools within the cryptocurrency community. It was created by an analyst going by the Twitter handle PlanB.
Forex Trading (Image: Sanandros/Wikimedia)
The first version, namely the original stock-to-flow ratio, described the stock as the size of existing reserves (or stockpiles) and the flow – the annual supply of bitcoins on the market.
The upgrade that followed was more complex and comprehensive. Apart from including the “stock” and “flow,” it also considered the different phases that BTC has gone through since its inception in 2019. Those include the initial “proof-of-concept,” the “payment” phase, “e-gold,” the latest one – “financial asset.”
The Bitcoin halving is arguably the most vital part of the models because it cuts in half the creation of new coins; hence, it decreases the “flow.” As such, PlanB and the S2F’s supporters follow BTC’s price performance after each halving.
In a recent tweet, the analyst asserted that Bitcoin moves like “clockwork” after the third halving in May.
A picture expeditor, Peninsula Visa partners with Coinbase Commerce to enable payment with Bitcoin.
The company becomes the first to enable such a payment service for US passports.
It’s no longer news that digital currencies are holding ground as a viable means of payment in the globe today. In recent months, Cryptopolitan reported about several merchants and companies that announced support for cryptocurrency payment. Today, Coinbase is enabling the public an option to make Bitcoin payments for the United States passport services via a partnership. This is reportedly the first time people are allowed to pay for such services using Bitcoin (BTC).
Bitcoin Cryptocurrency (Image: MaxPixel)
Peninsula Visa now support Bitcoin payment
The Bitcoin payment is supported by Peninsula Visa following its Coinbase Commerce, the digital currency payment arm of Coinbase exchange. Peninsula Visa is a passport expediting company based in Silicon Valley. Per the announcement, the Bitcoin payments will also be secured by the Coinbase processor. Evan James, the COO of Peninsula Visa, commented that the company is the first to support such payment options for US passport services in the nation.
“Never before has anyone been able to pay for a US passport using a digital currency,” James said. Meanwhile, Bitcoin payments are currently supported for four passport services, with many slated to be rolled out by next year. Cryptocurrencies, especially Bitcoin, have been gaining more adoption in the Travel industry.
Bitcoin could surge by up to 1,000% and reach $170,000 if it closes November’s monthly candle at or above $13,880, based on historic performance.
A popular Bitcoin analyst and trader pointed out that Bitcoin has historically headed towards massive price surges once it closed higher than the previous monthly high. As a result, BTC could face up to a 1,000% price pump soon if it closes November at or above its current price.
BTC To Pump By 1,000% Soon?
Bitcoin has been surging in value in the past month. The impressive performance led to several consecutive yearly records and reaching $16,000 last Friday – the highest BTC price displayed since early January 2018.
Bitcoin Price Chart (Image: NikonD300/MaxPixel)
Although the cryptocurrency has retraced since its peak and currently trades at about $15,400, the analyst Josh Rager suggested that the asset could soon skyrocket even further. Rager noted that “every time Bitcoin has closed above the previous monthly all-time high – a 700% to 1,000% uptrend has followed.”
The first similar scenario highlighted in his graph occurred in 2013. BTC’s January monthly close was around $20, which coincided with the previous monthly high. Shortly after, the primary cryptocurrency spiked to about $150 – or a near 700% increase.
Somewhat identical events transpired on two more occasions in 2014 and during the parabolic price increase of 2017. The latter is also the current benchmark as BTC closed in December at about $13,880.
With Bitcoin’s price hovering above that level now, Rager believes that “November could be the first monthly close that we see breaking the previous high.”
Should his prediction materialize, Bitcoin will find itself in a six-digit price territory. The “modest” 700% increase will take BTC to $120,000, while the 1,000% surge will result in $170,000 per coin.
The American election is over, if not yet finally decided. But bitcoin (BTC) barely seemed to notice. It finished Election Day pretty much where it began — with within a few percent of USD 13,500.
That’s because basic economic reality remains unchanged.
Flagrant money-printing, once begun, is a tough habit to break. And debt has become so astronomical in size, the merest whiff of higher interest expense threatens to push vast swaths of the economy into bankruptcy.
That virtually guarantees near-zero interest rates will continue indefinitely.
This reality is causing a broad shift in sentiment toward crypto assets
Just a couple years ago, for example, investment market sentiment was overwhelmingly bearish. Talking heads on Bloomberg and CNBC routinely labelled crypto “the biggest bubble of all time.”
Warren Buffett famously said bitcoin was “rat poison squared.”
JPMorgan Chase & Co. CEO Jamie Dimon declared bitcoin a “fraud,” saying: “If you’re stupid enough to buy it, you’ll pay the price for it one day.”
Fast forward to the present, and how dramatically things have changed. Now, JPMorgan analysts say BTC has “significant upside,” as it competes with gold as an alternative reserve asset — especially among millennials.
Their conclusion:
“Even a modest crowding out of gold as an alternative currency over the longer term would imply doubling or tripling of the bitcoin price from here.”
Bitcoin’s price has broken $15,000—breaking highs not seen since the 2017 bull run. But what’s propelling this momentum?
In brief
Bitcoin’s price continues to rise, and institutional investment is a major reason for this increase.
The world’s most popular stablecoin Tether has also played a significant role.
Bitcoin is now closer to $20,000 than $10,000.
Bitcoin Network (Image: MaxPixel)
Institutional investment is one of the biggest reasons why Bitcoin’s price keeps going up. Bitcoin has added nearly $5,000 to its price in the last month, has shot up $2,000 in the last two days and is currently at around $15,600—quite the ride.
In August and September of this year, MicroStrategy invested a total of $425 million in Bitcoin. One month later, Square followed suit, investing $50 million in the famed cryptocurrency. Also in October, PayPal announced features that allowed users to trade in Bitcoin, as well as Ethereum, Litecoin and Bitcoin Cash. All of these high profile moves have worked wonders for Bitcoin’s explosive growth.
“The recent flurry of institutional activity—particularly the involvement of a household brand like PayPal—has undisputedly impacted the price of Bitcoin as mainstream interest and trust in this form of investment often increases following such news,”
Antoni Trenchev, managing partner of Nexo, told Decrypt.
This wave of mainstream interest, dubbed by Jason Deane, Bitcoin analyst at Quantum Economics, as the “MicroStrategy Effect” has provided several highlight moments in recent months.
After predicting a significant bull run for Bitcoin and calling it a “life raft,” Raoul Pal discussed several issues within sectors of the traditional financial world.
Bitcoin Cryptocurrency (Image: MaxPixel)
Former hedge fund manager and CEO of Real Vision, Raoul Pal, believes that the real impact of the COVID-19 pandemic is about to reach the financial markets. By outlining several upcoming cornerstones among traditional financial assets, he highlighted Bitcoin as the “life raft” in this situation.
Raoul Pal: Everything Has Changed
In a recent Twitter thread, the Wall Street veteran outlined the rapidly growing COVID-19 cases worldwide. The total number of infected has neared 45 million, while the death toll is almost 1,2 million.
Pal predicted that these rising numbers in Europe, the US, and Canada are about to “exert economic pressures and extinguish the Hope phase of reflation dreams.” He believes that the upcoming consequences will harm the economy even more than the early 2020 developments. A real economic recovery “will take more than a post-election stimulus in January.”
He continued by looking at several markets that have started to feel the adverse consequences and have fallen to long-term support levels. Those included the oil price, Spain’s benchmark stock market index – the IBEX 35, the EU Banks Index, the euro, the British pound, the US dollar, and more.
As such, he broached a few possible solutions – “you can buy bonds and dollars, or you can take the life raft – Bitcoin.”
“Or, to dampen the volatility of a risk-off event (we can and will see sharp BTC corrections), you can have all three for a near-perfect portfolio for this phase.” – Pal concluded.
The sale and promotion of derivatives of bitcoin and other cryptocurrencies to amateur investors is being banned in the UK by the financial regulator, the Financial Conduct Authority (FCA).
It is a further blow to the burgeoning cryptocurrency market, coming soon after the US authorities indicted the owners of leading crypto derivatives exchange BitMEX for operating without being US-registered and allegedly failing to follow anti-money-laundering rules.
Forex Trading (Image: Sanandros/Wikimedia)
In view of recent findings from the University of Cambridge that most firms involved in crypto investments are still operating without a license, other operators are potentially vulnerable to indictments too.
It all sounds like bad news for anyone hoping that more investors will put money into cryptocurrencies. But on a closer inspection, I’m not so sure.
Drops and oceans?
The FCA is preventing retail investors from buying and selling the likes of cryptocurrency futures and options, which people often use as a way of hedging their bets on an underlying asset. For example, you might buy an option to sell a certain number of bitcoin at today’s price if the price falls by 10%, giving you an insurance policy in case the market moves against you.
The FCA said it was introducing the ban from January 6 because amateur investors were at risk of “sudden and unexpected losses”. The reasoning is that these people often don’t understand the market, there is lots of “market abuse and financial crime” in the sector, cryptocurrencies are very volatile and they are hard to value.
To stress, the ban is not being extended to professional traders or institutional firms like hedge funds, which have typically been allowed access to riskier financial products than the general population. It is about protecting people who might have been drawn to bitcoin thinking “it may be the currency of the future”, having “heard sensational news coverage about the rise and fall”. There are any number of splashy trading sites offering them quick and easy entry into this world, and YouTube influencers who enthusiastically encourage them to try complex trading.
Some 1.9 million people – around 4% of the adult population – own cryptocurrencies in the UK. Three-quarters have holdings worth less than GBP 1,000 (USD 1,305) and would certainly qualify as retail investors. We don’t know what proportion of UK investors use crypto derivatives, but we do know that the worldwide trade in these financial products was nearly a fifth of the total crypto market in 2019 (and has been growing rapidly in 2020).
Yet retail investors are probably not the main users of derivatives. Trading site eToro said earlier this year that maybe only a tenth of their retail investor spend was on this segment. And with most of the UK contingent using non-UK based exchanges, it’s easy enough to avoid FCA jurisdiction. The FCA says the ban could reduce annual losses and fees to investors by between GBP 19m and GBP 101m.
The ban also doesn’t make much difference at a worldwide level. The UK crypto market is small beer compared to global cryptocurrency holdings, which are worth around USD 400bn. You would not, therefore, have expected the FCA ban to have a material detrimental impact on the price of bitcoin or leading alternative coins like ethereum, and sure enough, it didn’t. In fact, it was widely expected by industry observers and had arguably already been priced in.
The largest cryptocurrency by market cap continued its upward spiral
Bitcoin’s price today hit highs of $13,329, according to metrics site CoinMarketCap. That’s Bitcoin’s highest price since last summer.
Bitcoin Price Chart (Image: NikonD300/MaxPixel)
Here’s the play-by-play: At 3:30 am UTC, Bitcoin’s price rose from $13,133 to hights of $13,329. The high lasted just two hours: at 5:44 am, Bitcoin’s price sunk like a stone to $12,996. Its current price is $12,961.
The last time Bitcoin’s price was this high was on June 26, 2019. Then, it peaked, ever so briefly, at $13,793, according to CoinMarketCap data.
Bitcoin maximalists’ victory today follows a particularly strong month for the largest cryptocurrency by market cap.
On October 6, Bitcoin’s price was around $10,600. But the price increased sharply this month to its peak today of $13,329. That’s an increase of about 25%.
Bitcoin’s price has thus more than tripled since that fateful day in the middle of March, when it momentarily crashed to just below $4,000 amid the market uncertainty caused by the coronavirus pandemic.
In 1987’s Black Monday stock market crash, Sam Walton, the world’s richest man, lost more than half a billion dollars in a few hours.
When reached for comment, Walton said, “It’s paper anyway. As far as I’m concerned we’re focusing totally on the company doing well and taking care of our customers.”
He didn’t care about dollars; he cared about his asset Wal-Mart, and he still owned that.
History of the #HODL
In bitcoin’s volatile and roller coaster past, “HODL” was the meme that bound the cryptocurrency community together. It stood for the proposition that we all believe in the future of bitcoin. It’s both funny and insightful.
Bitcoin Cryptocurrency (Image: MaxPixel)
Here is the original post by GameKyuubi on a Bitcoin Talk forum (spelling errors and profanity included):
I AM HODLING
I type d that tyitle twice because I knew it was wrong the first time. Still wrong. w/e. GF’s out at a lesbian bar, BTC crashing WHY AM I HOLDING? I’LL TELL YOU WHY. It’s because I’m a bad trader and I KNOW I’M A BAD TRADER. Yeah you good traders can spot the highs and the lows pit pat piffy wing wong wang just like that and make a millino bucks sure no problem bro. Likewise the weak hands are like OH NO IT’S GOING DOWN I’M GONNA SELL he he he and then they’re like OH GOD MY ASSHOLE when the SMART traders who KNOW WHAT THE FUCK THEY’RE DOING buy back in but you know what? I’m not part of that group. When the traders buy back in I’m already part of the market capital so GUESS WHO YOU’RE CHEATING day traders NOT ME~! Those taunt threads saying “OHH YOU SHOULD HAVE SOLD” YEAH NO SHIT. NO SHIT I SHOULD HAVE SOLD. I SHOULD HAVE SOLD MOMENTS BEFORE EVERY SELL AND BOUGHT MOMENTS BEFORE EVERY BUY BUT YOU KNOW WHAT NOT EVERYBODY IS AS COOL AS YOU. You only sell in a bear market if you are a good day trader or an illusioned noob. The people inbetween hold. In a zero-sum game such as this, traders can only take your money if you sell.
so i’ve had some whiskey
actually on the bottle it’s spelled whisky
w/e
sue me
(But only if it’s payable in BTC)
It was not about bitcoin versus bitcoin cash or 1,000 other cryptocurrencies. It was bitcoin vs. the world and we ALL embraced it.
It only took 11 minutes for this post to become a meme that became the rallying cry for the entire crypto world. We were all on the same rollercoaster ride and GameKyuubi, in the depths of his frustration, had (sort of) elegantly articulated both what it feels like and the best trading strategy for an asset this volatile.
Peter Thiel has once again endorsed bitcoin, which he recently argued is tantamount to digital gold.
And much like gold, the billionaire co-founder of PayPal conjectures that the cryptocurrency is destined to be a store of value rather than a means of payment.
Bitcoin (Image: MichaelWuensch/Pixabay)
“It’s like bars of gold in a vault that never move,” he told a CNBC reporter during a conversation at the Economic Club of New York last week, adding
“It’s sort of hedge of sorts against the whole world falling apart.”
He also struck a bullish tone on bitcoin in particular – versus other cryptocurrencies – suggesting that the largest cryptocurrency by market capitalization will maintain its position.
“There will be one online equivalent to gold,” he reportedly claimed, “and the one you’d bet on would be the biggest.”
