Last month, the popular bitcoin analyst and creator of the
stock-to-flow price model, Plan B, explained that he believed the “bull
is not over.” On August, 6, Plan B is still showing confidence in his
forecast and reconfirmed his message from last month. Meanwhile, bitcoin
prices have been able to bounce back and on Sunday, bitcoin prices
tapped a high of $45,355.
Plan B Shows Confidence in Previous Forecast While Bitcoin Prices Tap Fresh Highs
Bitcoin (BTC) has been on a tear lately and oddly enough in the face of regulatory uncertainty in the United States. BTC
has gained over 11% during the last seven days and 30-day stats show
the leading crypto asset is up 31% against the U.S. dollar. Since the
opening trading sessions on August 5, at $39,734 per BTC,
the crypto asset has gained 12.97% in three days. Moreover, following
the bullish action, the infamous pseudonym leveraged by the Twitter
account @100trillionusd, also known as “Plan B,” seems more confident the bitcoin bull run is not over.
Bitcoin.com News has reported on Plan B’s outlook on various occasions since he started documenting his popular stock-to-flow (S2F) price model back in March 2019. The incognito analyst has also updated the S2F price model to the stock-to-flow cross-asset (S2FX) model.
On June 1, Bitcoin.com News explained
how Plan B thought the S2FX model was still intact and he claimed it
was starting to look like 2013. A number of analysts have been comparing
this run to the 2013 bull run because during that time BTC saw a double top.
On August 1, Plan B explained that BTC’s
realized capitalization was on the rise and in his opinion, things were
looking bullish. “Bitcoin’s realized cap is rising again,” Plan B said. “Realized cap is the average price at which all 18.77M BTC
were last transacted (calculated over all UTXO’s). Also, the few
sellers at the moment sell at a profit (not a loss like in May and
June). IMO this is bullish.”
At press time the number of bitcoin (BTC) in circulation today is 18,779,913 BTC and the reward halving is expected in just over 1,008 days from now. At that time, BTC’s
issuance will become far more scarce, as the block reward of 6.25 coins
per block will be reduced to 3.125 coins per block post halving.
Plan B’s S2F or S2FX is all about scarcity and essentially the crypto
asset’s low issuance rate and scarcity should bolster the value of BTC over the long term. Basically the stock-to-flow measures the abundance or lack of when it comes to BTC’s long-term issuance rate. The current amount of BTC (stock) is simply divided by the number of bitcoins produced (flow) on an annual basis.
In Plan B’s original thesis
he also published a chart of other products like precious metals (gold
& silver) to describe how the S2F model works with different
commodities. Gold historically has shown the highest S2F ratio at least
in terms of commodities like precious metals.
Bitcoin, on the other hand, has a much higher S2F ratio which means
over the long term, the crypto asset retains value or rises from
significant demand. In 2019, when Plan B published his original model he
added that “gold and silver, which are totally different markets, are
in line with the bitcoin model values for SF.” The analyst also
emphasized there’s an “indication of a power law relationship.” The
pseudonymous analyst added:
The model predicts a bitcoin market value of $1trn after
next halving in May 2020, which translates in a bitcoin price of
$55,000.
Plan B: ‘August Will Close Above $47K’
After May 2020, the price of BTC
did jump over the $55K per unit zone and the market valuation also
spiked over a trillion dollars in overall value. Since then the price of
BTC has dropped significantly on two occasions but Plan B is still confident.
On August 6, Plan B re-tweeted
an older tweet he published on July 2 and said: “Just to reconfirm this
message from last month.” At that time, Plan B said that he believes
the bull run is not over and today it seems he’s fairly certain his old
statement from the first week of July still rings true. Plan B said:
My onchain data (color overlay in the chart below) tells
me this bull is not over and 64K was not the top. That is in line with
[the] S2F(x) model. Also my floor indicator (not based on S2F) says we
will not go below $47K Aug close.
Plan B clarified that the floor estimator was not based on S2F when a person asked the analyst a question.
“So Aug will see the price go above 47k? Is that what you mean?” the
Twitter account dubbed “Crypto Storm” asked. “August will close above
47k. Ps, this floor estimator is not based on S2F,” Plan B replied.
