Everybody get started! – With the new euphoric start to its latest bull market, Bitcoin (BTC) is entitled to an even higher frequency of price predictions than usual.
After the (interested) announcement by actress Lindsay Lohann a few days ago, today it is the most serious hedge fund Pantera Capital that is playing the game.
Pantera Capital’s previous predictions were correct
In a letter to its investors published on January 16, the hedge fund Pantera Capital reminds that the prices of Bitcoin Up reviews are currently in line with its model presented in April-May 2020.
This model, strongly inspired by the Stock-to-Flow (or S2F) of precious metals, focuses on the phenomenon of halving in the Bitcoin ecosystem. This process takes place approximately every 4 years – every 210,000 blocks of transactions validated to be precise – and consists of halving the reward given to miners when they validate a block.
Pantera Capital’s experts have estimated that, according to this model :
„(…) The market bottom typically occurs 1.3 years before halving and, on average, the market peaks 1.2 years after. This is a cycle of about 2.5 years. »
Thus, if the model proves to be accurate, we would still be a long way from the market high of the current cycle. According to hedge fund analysts, this new price record should be reached „in August 2021“.
They estimate the price of a single bitcoin at $115,212 for the summer of 2021.
The Stock-to-Flow Model of Bitcoin Prices – Source Pantera CapitalThe Stock-to-Flow Model of Bitcoin Prices – Source Pantera CapitalThe Stock-to-Flow Model of Bitcoin Prices – Source Pantera Capital
Will the shortage of supply lead the king of cryptos to his new summit?
The driving force behind this potential spectacular price rise, announced by the hedge fund, would be the combination of a drop in the number of bitcoins per block with significant pressure on demand.
As far as the drop in production is concerned, it is certain and has already been recorded since May 2020. Indeed, with the latest halving to date, it is no longer 12.5 bitcoins but only 6.25 BTC that are produced at each new mined block (approximately every 10 minutes).
As for the shortage between supply and demand, although the buying pressure on bitcoins was very strong at the end of 2020 – between funds like Grayscale or companies like MicroStrategy – the first signs of stock shortages have just surfaced and still seem far from having been „taken“ (taken into account) by the market.
In the meantime, even without it, Pantera Capital’s Bitcoin Fund has performed very well in 2020. The fund has indeed recorded a nice +299%.
It is difficult to be pessimistic about Bitcoin’s short-term future. Although the price increase of the last few weeks may seem impressive, the upward (and indeed downward) volatility of Bitcoin has already shown us much more. As Pantera Capital’s letter concludes, „A $5,000 BTC seemed equally ridiculous for our first price forecast, written when we launched our $65 Bitcoin Fund by BTC.