What Next for the Price of Bitcoin?
According to reports, the recent rise in the price of Bitcoin (BTC) was driven by capital inflows, reduction in the active supply, and rising inflation concerns. As well as BTC also Ethereum (ETH) surpassed all-time highs to set the bullish tone for the week.
BTC achieved a new high of $68,492 at 12:00 a.m. on November 9, surpassing the all-time high of $67,016.50 set on October 20, while ETH hit a new high of $4,821.
This bull market instilled confidence in investors. According to Cointelegraph, the BTC market been driven by investors who “appear to be increasingly sitting on their hands in hopes of higher prices, with the share of Bitcoin’s supply that has remained inactive for the past three months spiking to a record high of 85%”.
PlanB, a well-known crypto influencer on Twitter well known for his stock-to-flow model (S2F), appears to have forecast the massive increase a few days earlier. He tweeted over the weekend, “Are you ready for a daily gain of more than $10,000?”
When we compare the previous date of the all-time high with the current date when looking at the rapid spike in November the S2F model shows a predictable pattern of increasing after each halving, the drop in the rate of new BTC being produced. “According to the laws of supply and demand, the dwindling Bitcoin supply should increase demand for Bitcoin, and would presumably push up prices. One theory, known as the stock-to-flow model, calculates a ratio based on the current supply of Bitcoin and how much is entering circulation, with each halving (unsurprisingly) impacting on that ratio,” explained a June 2021 article in Decrypt.
Some experts believe that BTC’s price at the end of November could not possibly exceed $98,000. That would make the price 60% more than it was at the start of the month — a big jump. However difficult this maybe to believe, the fact is BTC has made similar big jumps in the past which suggests the price optimism does have its past precedents:
· May 2019 +62%
· August 2017 +66%
· May 2017 +66%
· November 2013 +451%
· October 2013 +61%
· March 2013 +181%
· February 2013 +63%
Judging from the increases over the past 200 weeks, the upward trend in price from the stock to flow model is clear in the graph below:
PlanB’s S2F model also indicated that the average price during the current BTC halving period would be $100,000. The S2FX model, on the other hand, predicts that the average value of the entire cycle will be $288,000 dollars. As a result, BTC will not only reach $100,000 USD in 2022, but there will also be some major breakthroughs. According to well-known analyst Matthew Hyland, quoted in Cointelegraph, the impact on the investment community once BTC hits $100,000 will be significant: “I believe the S2X model will be the catalyst for the late stages of the euphoric run because when PlanB is proven correct about the S2F model ($100k) then many will believe the S2X model ($288K) will be proven correct too,” he explained.
Another high-profile market news event that has gotten a lot of attention this week is Tesla CEO Elon Musk’s poll to his supporters on Twitter asking whether to sell 10% of his shares, worth around $20 billion. “Elon Musk doesn’t like to do things in a conventional way and so holding a poll on Twitter about whether he should sell 10% of his stake in Tesla might seem crazy, but one could say it is normal behaviour for him,” said Russ Mould, director at AJ Bell Investment, in a BBC report. Meanwhile, Michael Thaler, a big BTC whale with over 110,000 Bitcoins, has advised that Tesla consider changing its financial sheet to Bitcoin and purchasing Bitcoin worth $25 billion. He claims that this will provide diversity, inflation protection, and additional benefits to all investors while also saving them money on taxes.
Such is the impact of the current BTC price rise, that many people have given up full-time jobs to try high-risk crypto trading instead, according to the latest study conducted by the CivicScience research company. From the research, 11% of respondents claimed they or someone they knew, had quit their work because of the financial independence provided by crypto asset trading.
“This data implies that crypto investments may have provided life-changing levels of income for some, while the wealthier owners of crypto use it more as another form of asset diversification rather than a source of income,” the study said.
The data also showed that of those who invested in crypto, 23% said they did so as a short-term investment, 28% for the long term, 16% did it because it was simple and easy, while 12% said it was their hedge to any economic downturn, a report in Markets Insider concluded. “The overall sentiment seemed to be positive though. Nearly 60% of respondents declared they are wealthier than they were last year, or at least have the same level of wealth,” it added.
The results may not come as much of a surprise as more people have turned to retail trading — both in equities and cryptos — during the height of the pandemic to stave off the effects of the pandemic — ranging from lockdown boredom to spending their multiple rounds of stimulus checks. But despite the popularity of trading multiple regulators and legislators have sounded the alarm about the dangers of driving engagement through “gamification” favored by commission-free trading apps such as Robinhood. For instance, US Securities and Exchange Commission’s Gary Gensler in May expressed concern that apps are increasingly using features like points, rewards, leader boards, bonuses, and competitions to boost user engagement.
In another milestone the worldwide cryptocurrency market value exceeded $3 trillion on November 8, according to pricing data from CoinGecko. BTC’s market value is 41.6% of the total, while ETH’s market share is 18.5%.
According to data, the global market value of cryptocurrencies reached $1 trillion in February this year and exceeded $2 trillion in May.
While in terms of market cap, Bitcoin is currently the eighth-most valuable asset in the world,
even ahead of Meta (Facebook).
As the data shows, based on the trends over the last few years’ the peak in BTC price has yet to arrive, so there’s no need to be overly concerned about buying at a high price. In fact, now that you know how to trade crypto, you may purchase and sell with added confidence, which is particularly useful to know for budding futures traders. This data also suggests that the time for significant profits may be coming soon.
Adding to the bullish market confidence Willy Woo, a well-known Bitcoin ‘Whale’, stated on Twitter that it is difficult to see Bitcoin falling below the $50,000 to $60,000 range, and that a further price rise is highly likely.
Another trend pushing the price is that more and more addresses have been activated, according to data on the chain. The current number of BTC holding addresses is 6 million, according to Tokenview, quoting the number of transactions in 24 hours as 47,800; and the number of unconfirmed transactions as 40,900. According to CoinShares, the inflow of bitcoin products and funds has reached a record high of $6.4 billion so far this year. According to their data, the overall inflow of cryptocurrency products and funds last week was $174 million, making it the 12th week in a row that institutional investors have poured money into the market.
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