Bitcoin must attract a giant $2.88 billion in net positive demand if it is to keep its $8000 price in the run-up to the block size halving event.
Demeester: Bitcoin Halving Run-Up Needs $2.8B
That was according to Adamant Capital founding partner and commentator Tuur Demeester, who this week offered an alternative perspective on Bitcoin’s short-term price potential.
In a tweet, Demeester noted that under the current 12.5 BTC block reward, positive demand would need to reach $100 million every week to maintain a Bitcoin price of $8000.
Calculation: 144 blocks/day × 12.5 btc/block × $8,000 × 200 days
— Tuur Demeester (@TuurDemeester) October 23, 2019
The block size halving is scheduled to occur in early May next year, at which time the reward miners receive from validating each block of transactions will drop to 6.25 BTC.
“For BTC to retain its current price at $8,000 until the May 2020 halving, we’d arguably need to see net positive demand of $2.88B before then,” he explained.
“That’s what’s required to buy up all newly minted BTC at $8k in next 200 days.”
Cementing The Next 6 Months At $8K
As Bitcoinist reported, the halving continues to form a focal point of interest for cryptocurrency proponents. In the face of sideways price action, one theory in particular claims that an average $8200 should characterize Bitcoin until then.
Based on historical performance, the Stock-to-Flow model for Bitcoin has so far almost exactly tracked its price behavior through the years.
After May 2020, predictions call for a wildly bullish phase to take over from the current trend. By the end of 2021, BTC/USD should be trading at above $100,000.
“If that’s not the case, then… all bets are off and (the model) probably breaks down. I don’t expect that to happen,” its creator, PlanB, said in an interview last week.
In terms of the previous halvings, 2020 is meanwhile set to be the most decisive yet. In both 2012 and 2016, dropping the block reward resulted in a bullish phase ensuing in the mid-term.
This time, however, Bitcoin’s higher price means that although the reward reduction is lower, the dollar equivalent which does not enter circulation is bigger than ever.
As analyst Crypto Rand noted on Twitter, while that figure per week was around $300,000 in 2012 and $8.2 million in 2016, the figure for 2020 could reach a giant $63 million.
What do you think about Tuur Demeester’s calculations? Let us know in the comments below!
Images via Shutterstock, Twitter @TuurDemeester
