Bitcoin

S2F Creator: Bitcoin Has Yet To Reach “Point of No Return”

Tony Spilotro · @tonyspilotroBTC | Jan 14, 2021 | 15:30

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After shaking off the worst selloff in months without a scratch, the current Bitcoin uptrend seems completely unstoppable. Despite the incredible momentum that took the cryptocurrency from $10,000 to $40,00o in a flash, the creator of the world’s most cited valuation model says the asset has yet to reach the “point of no return.” When that happens, the real parabolic advance will unfold. 

Here’s what to expect from Bitcoin when it enters the final phase of its bull run later this year.

Plan B: Bitcoin Rally Heats Up, But Hasn’t Reached “The Point Of No Return”

Bitcoin fever is hotter than ever, now the topic of interest of top economists, institutional investors, and hedge fund managers. After writing it off as just a fad, Wall Street and the wealthy are finally beginning to hold the digitally scarce asset.

RELATED READING | BITCOIN WEEKLY “RELATIVE STRENGTH” MORE POWERFUL THAN RECORD 2017 RALLY

The sudden surge of demand coupled with diminishing supply, has caused a bullish breakout that send the price per BTC soaring by more than five times over. The uptick in price appreciation has long been predicted by Plan B’s stock-to-flow model (S2F), but has only recently started to show validity.

#bitcoin $38K is nice, but I am still waiting for that larger monthly jump that usually marks the phase transition / the point of no return (red arrows) #phase5 pic.twitter.com/mWOLadqOys

— PlanB (@100trillionUSD) January 14, 2021

The model had some investors expecting the cryptocurrency to trade above $50K by May 2020, but that date came and went, and Bitcoin has still yet to reach such a level. But according to the model’s creator, it very well could soon reach that number and then some, once Bitcoin reaches the “point of no return” in this parabolic cycle.

Can History Calculate The Cryptocurrency’s Remaining Upside?

The stock-to-flow model attempts to affix a estimated valuation on the price per BTC based on scarcity alone. The asset’s hard-coded block reward halving mechanism, further diminishes the already limited supply. When that occurred on May 2020, even though there wasn’t an immediate reaction sending prices to over $50K, it did put Bitcoin on the path it is currently on.

RELATED READING | HERE’S WHAT HISTORY SAYS TO EXPECT FROM BITCOIN IN 2021

And while there are stunning comparisons between now and the 2017 peak, Plan B’s model shows that the real bull run hasn’t even begun yet. That’s the point of no return the model’s creator is referring to.

Each point of no return offered 600-800% ROI following | Source: BTCUSD on TradingView.com

The chart above demonstrates what “the point of no return” looks like. From that point on, the leading cryptocurrency by market cap adds another between 600-800% to its value. A similar rise from current levels, would put the price per BTC at around $250,000 to $350,000, which isn’t unrealistic considering the targets experts from all walks of life are predicting.

Superimposing the previous bull market over the current one, puts the top at a trajectory of around $325,000. Analysts have offered targets reaching as high as $400,000 to $500,000 per coin in the long-term.

Bitcoin rising higher from here is less important of a question than how high it goes, and when the point of no return begins.

Featured image from Deposit Photos, Charts from TradingView.com and Plan B