Is the Price of Bitcoin about to Surge?


Author: Jeffrey Taylor

Since Bitcoin halved in early May, the cryptocurrency has struggled to break over the $10,000 level. This is something that could be about to change.

Since early 2020, the price of Bitcoin has gone up by about 30 percent. It is currently on track to be the best performing asset of this year. An anonymous strategist who claims to be part of an institutional investment group that has around $100 billion in assets under their management, has released an updated stock-to-flow model. The model suggests that the price of Bitcoin could be poised to surge to $100,000.

A widely respected analyst who goes by the name “Plan B,” created the stock-to-flow pricing model for Bitcoin. The most recent update to the chart was published on the last day of May. The update was no surprise. It was expected to be publicized since the third Bitcoin supply halving of last month. The update is seen as a signal for the beginning of an 18-month Bitcoin price cycle, putting the crypto at or near $100,000 before the dawn of 2021. The model calculates the ratio between the existing supply of Bitcoin against the number entering circulation.

Precious Metal Stock-to-Flow Ratios

Gold has a stock-to-flow ratio of 62. This means it would take 62 years of production of the metal to get to the current stock of gold. Gold has a high stock-to-flow ratio. Due to the scarcity of the metal, investors value it highly. Silver has a lower stock-to-flow ratio. It will take 22 years of production to reach its current stock.

Bitcoin Stock-to-Flow Ratio

The current stock-to-flow ratio of Bitcoin is 50 following the crypto’s third halving last month. The halving event saw the Bitcoin halving saw the miners reward cut by half. The halving reduced the number of coins rewarded to 6.25 from the previous 12.5. Miners are those who maintain the Bitcoin network.

Late in 2019, Plan B suggested the price of Bitcoin should reach $100,000 by the following December. Plan B went on to say that if that did not happen then, all bets are off, and his model would probably break down, which he does not expect to happen.

Plan B is not the only analyst to suggest a fourth cryptocurrency cycle could be just over the horizon. Others have also suggested that the third crypto winter has come to a close, and a new cycle seeing the price of Bitcoin rise has begun.

The last cycle in 2017 spawned many exciting projects over a wide range of activities. The cycle influenced payment systems, finance, infrastructure projects, games, and web-based apps. Chris Dixon and Eddy Lazzarin of Andreessen Horowitz Partners see many new projects launching in the not too distant future, possibly being the driver of a fourth crypto cycle.

The founder of Reddit, and an early investor in Bitcoin and crypto exchange Coinbase, was quoted as saying he too sees the early evidence of a “crypto spring.”


Jeffrey Taylor is a retired mechanical engineer who has an interest in all things financial, including emerging markets and cryptocurrencies.