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Bitcoin (BTC), the leading cryptocurrency and an uncontested giant in the digital token space, has been earmarked for a historic bull run by a number of well-known analysts in the aftermath of the token’s much-publicized ‘halving’ event. Now, the latest iteration of PlanB’s Stock-to-Flow (S2F) model has provided a fresh impetus for the cryptocurrency’s upward momentum.
As a refresher, S2F models determine the value of tokens by comparing the addition of new supply from mining with the existing volume in circulation – also known as the stock.
The analyst PlanB tweeted on the 31st of May that his S2F model for Bitcoin was now depicting a ‘red dot’ – meant to indicate an imminent price increase.
— PlanB 🔴 (@100trillionUSD) May 31, 2020
Although many analysts have predicted an imminent bull run for Bitcoin in the aftermath of its ‘halving’ event, PlanB’s recommendation is unique for providing precise temporal guidelines for such a rally.
Bear in mind that the analyst PlanB had claimed in a 27th April blog post, meant to introduce the third iteration of his stock-to-flow (S2F) model, that Bitcoin’s market capitalization will inflate to $5.5 trillion by 2024, corresponding to a token price of $288,000!
Analysts have generally pegged Bitcoin’s ongoing rise to a confluence of supporting factors, with the cryptocurrency’s recent ‘halving’ event likely serving as a potent tailwind. As we have explained previously, before the 12th of May, miners were awarded 12.5 Bitcoins for every block mined. These awards are cut in half every four years to keep a lid on the cryptocurrency’s inflation with the mechanism baked into the token’s underlying code. As of the 12th of May 2020, the reward was again cut in half – in the third such ‘halving’ event – to 6.25 new Bitcoins for every block mined.
Some of the most massive increases in Bitcoin’s price in the past have been preceded by these ‘halving’ events. For instance, the premier token rose from $12 to over $1,000 in the 12 months that followed its first halving event in 2012. Similarly, the cut in mining reward in 2016 produced gains of 1,000 percent in its aftermath.
With Bitcoin having undergone its third halving event in May, the cryptocurrency’s issuance rate has now dropped to 1.8 percent. It should be noted that Bitcoin’s first post-halving rally was led by early adopters, the second by retail investors, and now the third is expected to be driven by institutional interest.
Year to date, Bitcoin’s price peaked on the 13th of February 2020 at $10,500. Currently, the cryptocurrency’s price is trading around $10,111.80, just 3.8 percent below the zenith for the year.
Of course, the cryptocurrency has witnessed a few interesting developments since its much-hyped halving event. For instance, on the 20th of May, the prolific Twitter account – Whale Alert – noted the transfer of 40 Bitcoins from a wallet that had remained dormant since 2009. Since the coins underpinning the transaction were mined within the first month of Bitcoin’s creation, rumors began circulating that the wallet belonged to Satoshi Nakamoto – Bitcoin’s purported yet elusive creator.
ℹ️ The coins in this transaction were mined in the first month of Bitcoin's existence.
— Whale Alert (@whale_alert) May 20, 2020
Of course, as is the case with all analyst recommendations, readers should exercise caution and perform their own due diligence before blindly taking these predictions at their face value.