Bitcoin Price

Top Investor: Bitcoin Could Rally Past $100,000 After the Halving

Top investors are coming into this event extremely bullish on the cryptocurrency market, with one hedge fund investor going as far as to say that the halving could boost Bitcoin above $100,000
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As this article is being written, estimates suggest that it is a mere seven days out from one of Bitcoin’s most anticipated events, well, ever. The event in question is obviously the 2020 block reward reduction, better known as the “halving.”

The halving is an event that will see the number of coins issued per Bitcoin block, around every 10 minutes, cut in half from 12.5 to 6.25. This will result in an instant 50% reduction in the inflation of the BTC monetary base.

Top investors are coming into this event extremely bullish on the cryptocurrency market, with one hedge fund investor going as far as to say that the halving could boost Bitcoin above $100,000 in the years ahead. It’s a strong assertion that a top analyst says can be backed up by math.

Bitcoin’s Halving Could Send Prices Above $100k: Ex-Wall Street Investor

Dan Morehead — a former Wall Street investor turned founder of one of the earliest crypto hedge and venture funds, Pantera Capital — recently weighed in on the potentials effects of the impending halving.

In Pantera’s April newsletter titled “Macro Impact On Bitcoin :: Pantera Blockchain Letter, April 2020,” Morehead explained that from a simple supply-demand analysis, it makes sense for investors to say that BTC will rise in the wake of the halving:

It seems reasonable to say that if the new supply of bitcoin is cut in half, all else being equal, the price should rise. This ceteris paribus line is easy to envisage. Most miners sell their block rewards as fast as they can. They need the money to pay for energy, data center space, and to buy faster chips in the never-ending arms race. When the number of bitcoins they receive and thus sell is cut in half, it’s got to have an impact.

As to the exact effect, Morehead noted that since the “reduction in supply is only 40% as great as [with] 2016’s halving,” that would imply 40% as “much price impulse” as the rally that followed the previous halving.

Assuming this is true, this would give Bitcoin a bull rally peak in the next few years of $115,212 per coin, around 1,200% higher than the current market price.

This is a bullish price estimate that has been echoed by PlanB, a pseudonymous analyst that is the creator of the Stock to Flow Bitcoin price (S2F) model, which suggests that the cryptocurrency’s value can be accurately derived by analyzing its level of scarcity.

The model, which PlanB claims is “cointegrated” with the price of BTC, meaning it’s not a coincidence the model matches Bitcoin, predicts a fair price of around $100,000 after the halving.

Bullish Halving Sentiment Comes Under Fire

Despite the popularity PlanB’s models have managed to garner, he has recently come under fire from a number of critics that say the fundamentals of the model are flawed.

Bitcoin’s stock-to-flow ratio and price are “NOT” cointegrated, according to Alex Krüger, an economist closely tracking the cryptocurrency space.

In an extensive Twitter thread published Apr. 29, the analyst stated that the S2F model is flawed because Bitcoin’s scarcity is algorithmic and known in advance (a.k.a. not random), making cointegration between BTC’s scarcity and its price impossible.

Krüger summed up his thoughts with the following conclusion:

People using S2F to predict BTC may as well be using the moon cycles to predict BTC. […] The S2F analysis is interesting. But the S2F model is useless for predicting price, as the underlying assumptions of the model are not met. Now and always.

This wasn’t the first time analysts have tried to debunk the positive effects of the halving, specifically in regards to the S2F model.

Resident at Bitcoin development firm Chaincode Labs, Hugo Nguyen, explained that  “anyone using the ridiculous S2F price model and consider flow to be effectively non-zero is just silly,” adding that halvings in the future will be “anticlimatic and increasingly a historical relic.”

In saying this, Nguyen is also challenging the idea that Bitcoin’s stock-to-flow can fit into the model because it is always known well in advance.



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I am a writer who has been following the cryptocurrency space since 2013. My insights and interviews have been featured in leading publications in the industry such as LongHash, NewsBTC, and Decrypt. When I am not writing, I work as a team member of the EXODUS division of HTC, a Taiwanese electronics company. I own a small amount of Bitcoin. Contact NickC@blockonomi.com

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