Pseudonymous Dutch analyst PlanB continues to stand behind his stock-to-flow model that links Bitcoin's previous bull runs to its increasing scarcity.
According to this model, the Bitcoin (BTC) price may reach $100,000 this year and will exceed $1,000,000 after the fourth Bitcoin (BTC) halving in 2024.
During this period, Bitcoin's yearly inflation rate will be below that of gold, which makes it an incredibly scare asset.
Right or wrong?
Mr. PlanB illustrated his thoughts with the prudent words of Carveth Read, the 19th and 20th century British philosopher and logician, on accurate and inaccurate forecasts.
PlanB admitted that his prediction isn't intended to be precisely correct at every single moment. But the direction of the Bitcoin (BTC) price movements predicted by this model is mostly accurate.
PlanB usually receives tons of negativity and sarcasm every time the Bitcoin (BTC) price greatly deviates from the trendline of his model. As reported by U.Today, these swings may either be bearish (Black Thursday of 2020) or bullish (2019 yearly-high of $13,777).
Some critics of the S2F model argue that PlanB's model doesn't take into account the demand side of the story.
Bitcoin's incredible run to $20,000, its current all-time high, was driven by retail investors who have lost interest in crypto.
Not all models are useful
In the discussion below his post, anonymous trader and analyst Dave The Wave remembered an ironic motto of George E.P. Box FRS, a great British statistician:
All models are wrong, but some of them are useful
According to the words of Dave The Wave, in this regard, the 'Stock-to-Flow' model is useful as it works, in general, for a long period of time.
Recently, Plan B announced that his other Bitcoin (BTC) price model based on difficulty swings and the proximity of halving events is incorrect. But his major theory remains in power despite the ongoing market depression caused by the COVID-19 outbreak.
Subscribe to U.Today on Twitter and get involved in all top daily crypto news, stories and price predictions!