On 20 June, with the price of bitcoin below $34,000, one analyst made the forecast that the cryptocurrency would rise by $13,000 by the end of August.
On 31 August, the price of bitcoin closed at $47,156 – less than a third of a per cent off the prediction.
The person making the forecast, a pseudonymous Dutch analyst named PlanB, has become renowned for the “astonishing” accuracy of his Stock-to-Flow (S2F) model, which is based on bitcoin’s inbuilt scarcity.
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S2F works by dividing an asset’s current supply (stock) by its annual production (flow), which for bitcoin halves roughly every four years. These four-year cycles come with boom and bust price rallies and corrections, with new peaks hit roughly 12 to 18 months after each halving event. The most recent halving took place in May 2020, and bitcoin hit a new record high just 11 months later – but according to the S2F model, this was just the first leg of the rally.
According to PlanB’s “worst case scenario”, bitcoin will return to…
