Analyst PlanB, the inventor of Stock-to-Flow, a popular Bitcoin (BTC) price prediction model, made a remarkable price prediction about BTC in his statement on Twitter. Reminding that the pump forecast after the halving event in 2020 holds, PlanB argued that a similar movement can be observed during the next halving.
Stating that his model has increased up to $66,000 in Bitcoin price for the 2020 halving, the analyst announced that when the same model is applied for the 2024 halving event, this time the target price is $532,000.
“In 2019 (BTC $4k) I published Stock-to-Flow model. S2F values BTC scarcity (2x every halving).
As predicted, BTC pumped an order of magnitude after 2020 halving. BTC might do the same next halving:
2020 halving: 0.455^3=66k
2024 halving: 0.4110^3=532k“
The stock-to-flow model is a way to measure the rarity of a commodity like gold or Bitcoin. It compares the total supply of the commodity with the amount produced each year. The higher the stock-flow ratio, the rarer the commodity is considered. The stock-to-flow model for Bitcoin has been used to make price predictions based on the assumption that Bitcoin’s rarity will continue to increase over time as the rate at which new Bitcoins are produced slows. In other words, the model predicts that as the amount of Bitcoin in circulation increases more slowly than the new supply, the price of Bitcoin will increase because it will become rarer. The model suggests that the price of Bitcoin could reach very high levels in the future due to its scarcity compared to other commodities.
Bitcoin is designed to circulate a fixed amount of new Bitcoin every 10 minutes through a process known as mining. This process involves solving complex mathematical equations to verify transactions and add them to the Bitcoin blockchain. However, the new Bitcoin production rate is deliberately reduced by 50% approximately every four years, or after every 210,000 blocks are mined.