The price of bitcoin temporarily exceeded the mark of $10,000, but the cryptocurrency was not able to maintain that achievement. However, according to some estimates, the price of bitcoin may exceed $100,000 within a year.
On 2 June, the bitcoin exchange rate exceeded $10,000. It took an hour and a half for bitcoin to jump from $9,709 to $10,155. But the cryptocurrency did not manage to gain a foothold above this mark, and after holding about 12 hours at this level, bitcoin again fell below $10,000. Currently, the capitalization of the first cryptocurrency fluctuates around $185 billion.
According to the popular Bitcoin analyst known on Twitter under the nickname PlanB, the bitcoin price can exceed $100,000 within a year, according to the Stock-to-Flow model. This formula gained popularity in the spring of 2019. It measures the ratio of the amount stored in reserves to the value of asset’s annual production. The current number of bitcoins in circulation is approximately 18.4 million, and its production is approximately 0.45 million per year. A year ago, the production level was approximately 0.7 million per year, but it decreased after the halving in May 2020.
The Stock-to-Flow Bitcoin Index is now 50 points after the May Halving.
“Somewhere between a year and a year-and-a-half after the [May 2020] halving, so say before Christmas 2021, bitcoin should be, or should have been above $100,000,” PlanB said late last year. He admits that this may not happen, and investors’ expectations will not come true, which will lead to a sharp collapse of the market. “I don’t expect that to happen.”
The well-known bitcoin enthusiast and developer Adam Back from Blockstream also forecasts a sharp increase in the bitcoin exchange rate. In his opinion, unlimited printing of money by central banks in the fight against the consequences of the pandemic will push retail investors to bitcoin and increase its price to $300,000 within the next five years. Such growth is possible even without large institutional investors entering the cryptocurrency market. According to Back, the main success of bitcoin is associated with retail investors, and their support will be enough for such growth, and institutional institutions will traditionally act more carefully.