A forecasting model that measures the “shortage” of Bitcoin (BTC) comes to the conclusion that the market-leading crypto currency should reach a price of at least 55,000 US dollars.
This “conservative” estimate for the price development of BTC / USD published the crypto expert Willy Woo on September 5th on Twitter.
Bitcoin wants to keep going up
Although Bitcoin has not even established the psychologically important $ 50,000 mark as a solid support, the blockchain data paints a very positive picture.
The so-called “Supply Shock Valuation Model” is no exception, as it expects a minimum exchange rate of 55,000 US dollars for Bitcoin.
In the model, only the no longer available currency units of Bitcoin are divided by the number of available BTC, which, however, allows a much deeper insight to be gained than expected. As Woo himself describes, with the forecast model he can “look into a crystal ball and foresee the intentions of investors even before they have placed their orders”.
“In this consideration of supply and demand, an investor who does not want to sell is on the demand side, while an investor who wants to sell is on the supply side,” as Woo had explained in a previous blog post.
Finally, the model uses an algorithm to compare the current situation with previous developments and arrive at a fair estimate.
“The forecast of the model is very conservative, because the shortage is currently at a record high, which is why no comparative look into the past is possible”, as Woo assesses the result.
In fact, the amount of Bitcoin available on crypto exchanges is currently higher than ever compared to the unavailable units.
The following graphic shows how the price development has so far behaved according to the model.
Bitcoin “scarcity” is often cited as a catalyst for longer Bitcoin uptrends. The record run this year could also be largely due to the Bitcoin halving last year.
Since the crypto miners are currently only remunerated with half (6.25 BTC) of the previous block reward, the amount of new Bitcoin available also decreases. In 2013 and 2017, the “halving” was also followed by a clear upward trend, which supports this thesis.
The “conservative” estimate of $ 55,000 is actually quite optimistic, because the popular stock-to-flow (S2F) forecast model, which is considered very optimistic, foresees only $ 43,000 as the minimum target for the end of September.
However, it is forecasting an increase to at least $ 135,000 by the end of 2021, which is still significantly higher.
At press time, BTC / USD is just over $ 50,000.