I’ve got the top rated and logical bitcoin price predictions below!
- Plan B Stock-to-Flow Model (S2F)
- Plan B Stock-to-Flow Cross Asset Model (S2FX)
- Citibank Bitcoin Price Estimate
- Scott Minerd, CIO of Guggenheim Investment Fund
- Tyler and Cameron Winklevoss Bitcoin Price Prediction
- JP Morgan Bitcoin Price Predictions
- Markshire Crypto Bitcoin 2021 Price Prediction
What has lead to the current price rise of bitcoin?
The latest Bitcoin halving occurred on 11 May 2020, cutting newly minted bitcoin supply from 12 BTC/block to 6.25 BTC/block.
Initially there was no movement in the price. As the cost to mine each bitcoin immediately doubled and then hash rate continued to increase over the ensuing weeks and months, miners had to run a very efficient operation in order to stay profitable.
Increased interest and demand for bitcoin grew (as it has been month over month and year over year since its inception), and with half as much new bitcoin per block, the supply was being dried up .
HODLers continued to dollar cost average in.
The market cap grew, leading more high net worth individuals, family offices, private corporations and institutions buying and holding
When the legendary investor Paul Tudor Jones announced he acquired bitcoin in back in May 2020, he reduced the professional risk of hedge fund managers, allowing them to allocate a very small percentage of their funds to bitcoin.
This further dried up supply.
Michael Saylor, founder and CEO of Microstrategy, a billion dollar publicly traded company, announced that Microstrategy would be putting bitcoin on their balance sheet, and subsequently acquired $450,000,000 and then another $650,000,000 worth of bitcoin ($1.1 Billion USD worth).
This further dried up supply.
Now… on to the much anticipated 2021 Bitcoin Price Predictions!
Plan B: Stock-to-Flow Model (S2F)
S2F Model: $55,000 Bitcoin
Plan B is an anonymous public figure on Twitter, who identifies as a Dutch quantitative analyst for a large investment firm, claiming to have managed many billions of dollars. He is featured in many podcast and YouTube interviews, although we never know his real name, specific location or what he looks like.
Near the end of March 2019 Plan B devised the stock-to-flow model for bitcoin, original article here. Stock-to-flow is the ratio of existing supply of any asset/commodity to the “flow” which is the new supply created. Commonly referred to with respect to commodities such as gold, silver, oil, wheat, etc.
Expressed stock:flow. So if there are 100 kg of gold in the world, and 2kg of new gold is mined per year, then the stock:flow of gold is 100:2, or “50”, or 2%. Plan B quotes gold’s stock-to-flow as being 62.
The stock-to-flow of bitcoin before the May 2020 halving was 25, and now, after the May 2020 halving, the stock-to-flow for bitcoin is 50, or 2%.
The S2F model is a formula based on monthly S2F ratios and bitcoin price data, in a time series model.
Based on the stock-to-flow value of 50 (2%) Plan B estimates the market cap of Bitcoin to be ~ $1,000,000,000,000 ($1 Trillion USD). Or a Bitcoin price of $55,000/BTC.
Plan B: Stock-to-Flow Cross Asset Model (S2FX)
S2FX Model: $288,000 Bitcoin
At the end of April 2020, about a year after the S2F model, Plan B published a newer Bitcoin price model called “Bitcoin Stock-to-Flow Cross Asset Model“. This model is more complex than the straight forward stock-to-flow.
In this model Plan B posits that bitcoin is a developing narrative that changes, or, transitions through different phases based off of bitcoin’s price, scarcity and certain milestones/achievements.
Plan B makes comparisons to water’s phase transitions:
Plan B draws attention to the fact that a parallel concept exists in finance with phase transitions in money.
- The USD used to be based on the commodity gold, where gold coins were actually as the dollar.
- Which then transitioned to paper notes directly redeemable and exchangeable on demand for gold in the bank.
- Since 1971, the USD was simply paper, based by nothing but the full faith of the United States Government (aka laws, tax and military).
- In fact today, most dollars are not even paper, but rather simple numbers on a bank’s balance sheet displayed on your account.
Plan B expresses Bitcoin’s phase transitions as follows:
- “Proof-of-concept” (after bitcoin white paper, zero price value, until initial price discovery) – S2F 1.3 and market cap $1M
- “Payments” -> USD parity (1 BTC = $1) – S2F 3.3 and market cap $58M
- “E-Gold” -> after 1st halving, almost gold parity (1 BTC = 1 ounce of gold) – S2F 10.2 and market cap $5.6B
- “Financial Asset” -> after second halving ($1B transactions per day milestone, legal clarity in Japan and Australia, futures markets at CME and Bakkt). – S2F 25.1 and market cap $114B.
Being a quantitative analyst, Mr. Plan B did some intense math involving regression analysis to devise the S2FX model.
The S2FX model predicts a Bitcoin market capitalization of ~$5.5 Trillion dollars, or a bitcoin price of $288,000/BTC.
Citibank Bitcoin Price Estimate
Citibank Technical Analysis: $318,000 Bitcoin
Fortunately crypto-Twitter got its hands on a leaked report from a Citibank technical analyst projecting the price of bitcoin in the coming bull cycle.
The report was prepared by CitiFX for its institutional investors. The report quotes an insane price of $318,000/BTC.
The article detailing the report is here.
The Twitter post that reveals all the details and analysis is here.
Scott Minerd, CIO of Guggenheim Investment Fund
Scott Minerd is the Chief Investment Officer of Guggenhein Investments, which is a very large investment firm that manages more than $233 billion USD in total assets.
In an interview with Bloomberg Markets Mr. Minerd estimated a bitcoin price of ~$400,000 USD/BTC, stating that bitcoin is more attractive than gold owing to its portability, and scarcity (6).
Apparently sources say that Guggenhein will allocate 10% of its micro-fund into Bitcoin (no not 10% of $233 billion) (6).
This is quite bullish.
Tyler and Cameron Winklevoss Bitcoin Price Prediction
In an interview with Peter McCormack on the What Bitcoin Did podcast back in October 2020 Tyley and Cameron Winklevoss make the case for a $500,000 bitcoin.
The jist of their argument is that Bitcoin is digital gold and it will replace gold’s market cap. Gold has a market cap of approximately $10 Trillion dollars. In order for Bitcoin to attain that it needs a price target of roughly $500,000/BTC.
You can listen to the full interview here: The Case For $500K Bitcoin.
Personally, I am not sure if bitcoin will be able to hit $500K this cycle, however, if it does, it may be transiently, for a few days or a week and then fall back down to the $100,000 range.
JPMorgan Bitcoin Price Predictions
Range $146,000 to $650,000
JP Morgan analysts have put out two price predictions for Bitcoin. One price, the most bullish I’ve seen, is $650,00/BTC, with the thesis of bitcoin’s market cap reaching that of gold’s. This was published in late December 2020. This is higher than the Winklevoss’ gold market cap parity thesis, likely due to gold’s increase in value since Oct 2020.
The low end estimate from JPMorgan is $146,000/BTC. Oddly, the article quoting this price target also suggests that this price can be achieved due to competing with gold as an alternate currency… perhaps estimating that bitcoin will not achieve the same market cap as gold.
Check the article here: JPMorgan says bitcoin could rise to $146,000 long term as it competes with gold.
Markshire Crypto Bitcoin 2021 Price Prediction!
Markshire Crypto: $250,000
My price prediction is simple… I am a man of science and math, and therefore I have to align myself with the estimate of Plan B’s S2FX model of $288,000. I will perhaps dull the prediction and lower mine to $250,000 bitcoin peak price for 2021. I would rather under-call it than over-call it.
I would love to look back and have been bearish in hindsight though.
- Paul Tudor Jones calls bitcoin a ‘great speculation,’ says he has almost 2% of his assets in it., Thomas Frank. CNBC. 11 May 2020. https://www.cnbc.com/2020/05/11/paul-tudor-jones-calls-bitcoin-a-great-speculation-says-he-has-almost-2percent-of-his-assets-in-it.html
- Modeling Bitcoin Value with Scarcity., Plan B. Medium.com. 22 March 2019. https://medium.com/@100trillionUSD/modeling-bitcoins-value-with-scarcity-91fa0fc03e25
- Bitcoin Stock-to-Flow Cross Asset Model., Plan B. Medium.com. 27 April 2020. https://medium.com/@100trillionUSD/bitcoin-stock-to-flow-cross-asset-model-50d260feed12
- Citibank analyst seemingly predicts $318K Bitcoin price for 2021., Jack Martin. Cointelegraph. 16 Nov 2020. https://cointelegraph.com/news/citibank-makes-tentative-318k-bitcoin-prediction-for-december-2021
- Citibank bitcoin technical analysis, @classicmacro (Alex). Twitter. 13 Nov 2020. https://twitter.com/classicmacro/status/1327381449000034307?s=20
- CIO of investment giant Guggenheim confirms Bitcoin price prediction of $400,000., Reynaldo. Crypto News Flash. 18 January 2021. https://www.crypto-news-flash.com/guggenheim-cio-confirms-bitcoin-price-prediction-of-400000/