PlanB: Bitcoin will drop 80% in the next crypto winter
In a new interview on YouTube’s FamilyOffice business and investment channel, pseudonym expert PlanB highlights some signs telling him that Bitcoin will eventually fall deep into bear territory.
“First of all, I’m one of the few who really think there’s going to be the next bear market, a crash like we’ve seen a few times before. A lot of people are now saying that we’ve finished the four-year cycle and we’re not going to have that kind of volatility and that kind of bear market anymore.
I think we will have these bear markets. You can see this in the option prices. Its price is 100% volatility. A few months ago, when China abandoned [Bitcoin] mining, we dropped 50% or more. So we almost had [a bear market]. We had a 50% drop right there. So that tells me that 80% [correction] when something really big happens is still not out of the question.”
PlanB says the next big drop is likely to come after Bitcoin hits the target prices of its stock-to-flow (S2F) and cross-asset stock-to-flow (S2FX) models. The model predicts the price of an asset by dividing the supply that already exists with the new supply entering the market annually.
Meanwhile, PlanB’s inventory-to-flow cross-asset model (S2FX) analyzes Bitcoin’s phase transitions from proof-of-concept to a financial asset in order to arrive at a valuation for BTC.
In the interview, he tells his prediction for the price of the cryptocurrency:
“I think we’re going to have to go up a little bit, at least to reach the $100,000 and $288,000 stock-to-flow model values. But after that, we’re going to drop 80% again… I think that’s part of the business, and it’s also part of the greed and fear that is in investors. People will not change.
There will be FOMO. If, for example, we hit the $100,000 level in a few months from now … people will enter the FOMO and it will increase. Then, after that, something horrible happens: another ban, another Chinese or Indian ban or something. Everyone is scared again and panic sets in. So I think fear and greed will never go away in Bitcoin.