The bitcoin bull is back and spirits are rising since U.S. regulators called on Facebook CEO Mark Zuckerberg to explain himself on Libra coin — then appeared more interested in other issues, Forbes reported.
That, coupled with the Chinese head of state describing blockchain as a “rule of law network”, are giving bullish bitcoin speculators confidence that the market will explode over the next couple of years.
Last week, respected bitcoin analyst PlanB restated his expectation that bitcoin will hit $100,000 before the end of 2021.
Unless there’s a radical change in bitcoin network computing power, the coin reward for mining new bitcoin blocks is expected to fall in May of 2020 from 12.5 bitcoin to 6.25 bitcoin, cutting the supply of new bitcoin coming onto the market by half.
“Somewhere between a year and a year-and-a-half after the (May 2020) halving — so say before Christmas 2021 — bitcoin should be, or should have been above $100,000,” PlanB said in a tweet to Global Macro Investor founder Raoul Pal.
PlanB created the stock-to-flow bitcoin pricing model, which calculates a ratio based on the existing supply of an asset against how much is entering circulation. Scare commodities such as gold are valued by investors for their scarcity and have a large stock-to-flow ratio. Gold has the highest ratio, according to the model — 62 — meaning it would take 62 years of gold production to get the current gold stock.
Bitcoin, by comparison, has a stock-to-flow ratio of 25. The PlanB model expects this to increase to 50 after the scheduled 2020 bitcoin halving, Forbes reported.
“If that’s not the case, then all bets are off and (the model) probably breaks down. I don’t expect that to happen,” Plan B told Pal.
Twitter users begged to disagree.
“$100k & $1M by 2021 are all nice things to hear & community is addicted to it since 2017,” @Super_Crypto tweeted. “Unfortunately, its NOT going to happen (the way people expect it). In Nov 2017 I told Bitcoin is going down and hard -95% after CME. Yes, I was wrong by 10%.”
“Agreed the party is over, will be lucky of we ever see 20k again,” @fathead___ tweeted.
In the past, China banned crypto exchanges, bitcoin trading platforms and mining. Now President Xi Jinping is calling for more research and investment into blockchain technology, setting off a frenzy of buying blockchain-related stocks, South China Morning Post reported today.
When Facebook CEO Zuckerberg testified before Congress last Wednesday about his plans for his proposed Libra cryptocurrency, many Republicans defended him, American Banker reported.
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Rep. Patrick McHenry, (R-N.C.) the top Republican on the House Financial Services Committee, said he didn’t want Congressional scrutiny of Facebook to restrict innovation.
“I have my own qualms about Facebook and Libra and the shortcomings of Big Tech — there are many,” McHenry said. “But if history has taught us anything, it’s better to be on the side of American innovation, competition, and most importantly the freedom to build a better future for all of us.”
In August, support forums for suicide prevention were shared on cryptocurrency forums after the price of bitcoin dropped to around $6,000 from $8,000 at the beginning of August, according to the Independent. In December 2017, bitcoin traded at a peak of close to $20,000.
On Twitter, a call went out for responsible behavior among experts.
“Dreaming feels good & is addictive, but misled people have lost fortunes in the $20K-$3k BTC dump,” @Super_Crypto tweeted. “This is not typical 85% dump. Cant compare $2 with $20k. Can someone take responsibility here? Those predicting $100k & $1M in 2018 should raise hands.”
