Category: Business

Move over S2F — Model creator says ‘90% chance’ BTC never dips below $11K again

“You’ll see some amazing things happen with Bitcoin in 2021,” the analyst said.

The author behind a valuation model for Bitcoin that’s based on Metcalfe’s Law says the crypto asset will likely be priced around $12,000 by the end of November and reach $1 million within a decade.

In an Oct. 11 Twitter thread, Timothy Peterson, Global Macro Manager at Cane Island Alternative Advisors, said there is “90% chance that Bitcoin will never again close below $11K.” Disclaimer: While he’s deadly serious, the prediction recalls the oft stated meme about the “last chance” to buy Bitcoin under $10K, which has frequently been proven wrong.

This might be the last chance to buy bitcoin under $10,000

— Mati Greenspan (tweets ≠ financial advice) (@MatiGreenspan) February 23, 2020

However, the analyst claims his model, which he first devised in 2017, has been more or less accurate so far. Peterson claimed to have successfully predicted the end of year prices of the cryptocurrency in the past two years. For 2018, he predicted a price of $3,500 — the actual price on Dec. 31 was $3,782, a difference of only 7%. Peterson also predicted a mid-range estimate of $7,000 for the end of 2019. The recorded price of Bitcoin was $7,243 on that day.

Using these methods, the analyst estimates Bitcoin (BTC) will be valued at $100,000 by January 2024 and $1 million by March 2028. He also issued a very specific prediction about the exact price on November 30 to naysayers who doubt the accuracy of his model:

6/10 On November 30th, 2020, #Bitcoin‘s price will be at or above $12,000 (90% probability). Write it down, screenshot it, whatever. I don’t care if you believe me or not. pic.twitter.com/EpmDdAPu2T

— Timothy Peterson (@nsquaredcrypto) October 11, 2020

Bitcoin’s supply is easily ascertainable — more than 18.5 million coins as of this writing — and Peterson believes demand can be measured by the number of BTC wallets. Using this information Peterson created a price model based on Metcalfe’s Law, which says the value of a communications network is proportional to the square of the number of its users. In Bitcoin’s case, the price would be proportional to the square of the number of connected users holding coins on the blockchain. In essence, BTC becomes more valuable as adoption grows. “Metcalfe’s law is a mathematical and scientific fact, like gravity and E=mc2,” said Peterson.

Anderson’s “lowest price forward” model is a competitor to the most popular Bitcoin valuation model, stock-to-flow (S2F), created by Crypto Twitter user PlanB, that predicts a Bitcoin price of $288,000 by the next halving.

However, ByteTree co-founder and chief investment officer Charlie Morris recently authored a report attempting to debunk the S2F model. Morris argues that since Bitcoin’s supply is fixed, the demand is more likely to determine the price, and pointed out the economic role of Bitcoin miners is diminishing over time.

“There are many reasons why the price of Bitcoin can rise or fall,” said Morris. “But S2F is not one of them.”

Peterson’s 7,718 Twitter followers pales in comparison to PlanB’s 139,200, so his message may not quite have the reach of S2F just yet. Despite their differences, both price prediction models see a bullish future for Bitcoin.

“You’ll see some amazing things happen with Bitcoin in 2021,” said Peterson.

Continue Reading

Tether’s market cap could overtake Ethereum’s next year — Bloomberg report

Expect Bitcoin in the number one spot and Tether second by market capitalization before 2022.

A new report predicts Tether could surpass Ether’s market cap by the end of next year, paving the way to mainstream adoption of stablecoins and central bank digital currencies (CBDCs).

According to Bloomberg’s Crypto Outlook report for Q4 2020 written by Senior Commodity Strategist Mike McGlone, Tether (USDT) is likely to take the number two position by market capitalization from Ether (ETH) in 2021. The report cited the “stagnant market cap” of ETH, which currently stands at $43.2 billion but remained under $30 billion for most of 2019 and 2020, before getting a boost from DeFi in late July.

USDT’s market cap, on the other hand, has seen steady growth since 2017, with just one significant dip in October 2018. The stablecoin began 2020 with a market capitalization of $4.1 billion, “rapidly rising” to $15.7 billion in October.

Market capitalization of Tether v. Ethereum. Source: Bloomberg

“It should take something significant to stall the increasing adoption of Tether,” McGlone stated. “If current trends prevail, the market cap of Tether may surpass Ethereum next year.”

Not everyone in the crypto community will appreciate the prediction. Crypto pioneer Adam Back told his 211,500 Twitter followers on Oct. 11 that Bitcoin (BTC) is “the only benchmark that matters” as he believes the majority of investor portfolios are denominated in the cryptocurrency.

#bitcoin is the unit a account already, for crypto traders. most portfolios are bitcoin denominated. it’s the only benchmark that matters, you want to know if your long/short/option/yield/alt trading strategy did better or worse, or you could have just held. not hodling is risk.

— Adam Back (@adam3us) October 11, 2020

“I use stablecoins, but I don’t hold them much as that’s short Bitcoin,” said Back. “Any strategy that doesn’t involve holding Bitcoin is at high risk of underperforming Bitcoin.”

Though the report suggests the demand for Tether indicates that the arrival of central bank digital currencies (CBDCs) is simply “a matter of time,” it also predicts a bullish future for Bitcoin.

Bloomberg stated BTC will be “adding zeros” as it rises from its current price of $11,448 to $100,000 by 2025. With a fixed coin supply of 21 million, “demand vs. supply metrics remain price-positive,” it said.

“Bitcoin could continue doing what it has for most of its nascent existence, appreciating in price on the back of increasing adoption, but at a slower pace,” the report stated.

“Most demand and adoption measures indicate Bitcoin is more likely to stay on its upward path.”

Continue Reading

By continuing to use the site, you agree to the use of cookies. more

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close