In a recent evaluation, prominent cryptocurrency expert PlanB asserted that Bitcoin‘s current price levels are significantly undervalued, considering the four-year cycle principle. Despite having once surged near its record highs, Bitcoin is now confined within a lower price bracket. PlanB emphasizes that this situation indicates an undervaluation of Bitcoin.
How Influential is the Stock-to-Flow Model?
PlanB underscores the significance of the stock-to-flow model, which asserts that scarcity directly influences a commodity’s price. According to the expert, Bitcoin should command an average valuation of $500,000 in the current cycle, far surpassing its present market value.
Based on this scarcity-driven model, PlanB suggests that Bitcoin is in the initial phase of its four-year cycle, predicting substantial price appreciation in the upcoming years.
“Bitcoin price at $104,000 is far behind the stock-to-flow value of $500,000. My expectation is for the cycle’s average to reach this level. We are still away from that and only in the first year, with three more years ahead. Therefore, I believe Bitcoin is undervalued.” – PlanB
What Are the Signals of an Early Bull Market?
A slight increase in Bitcoin value followed the recent launch of Bitcoin exchange-traded funds (ETFs), before reverting to the formative stages observed in prior bull markets. This transition suggests, according to PlanB, that the market is at the outset of a growth phase.
Currently priced near $104,300, Bitcoin is identified by PlanB as commencing a “bull market” trajectory, with historical data affirming similar price advancements as precursors to upward movements in past cycles.
“After spot Bitcoin ETF approvals in January 2024, there was a temporary rise in the bull market region. Now prices have returned to where all past bull markets began. To me, this is a highly positive signal.” – PlanB
Can Bitcoin Reach New Heights?
PlanB forecasts Bitcoin aiming for an average value ranging from $250,000 to $1 million in the ongoing cycle, projecting a potential 860% price increase.
“Bitcoin is currently in a bull market, targeting an average price of $250,000 to $1 million in this cycle.” – PlanB
Although PlanB’s predictions are optimistic, he stresses that investors should complement his insights with their analyses due to uncertain price outcomes. Diverse perspectives can provide a comprehensive understanding of potential market scenarios.
Key Insights:
- Bitcoin’s current pricing is significantly below the stock-to-flow target.
- History suggests the onset of a bull market following ETF developments.
- Future price targets range widely, from $250,000 to $1 million.
Investment decisions should be informed by weighing both macroeconomic trends and intrinsic scarcity as factors influencing price movements. By regularly assessing market conditions and integrating varied analyses, investors can better navigate the volatility inherent in cryptocurrency markets, awaiting the unfolding of PlanB’s price projections over time.
