PlanB shares chart pointing to $135,000 for December

PlanB shares chart pointing to $135,000 for December

On June 20, with Bitcoin trading below $34,000, an analyst known as PlanB published a chart of monthly forecasts on his Twitter account that many read as reckless. His most pessimistic scenario for 2021 was as trinc: August above $47,000, September above $43,000, October above $63,000, November above $98,000 and December above $135,000. What was striking was not the optimism, but the fact that the author presented it as the worst of all possible cases, not the best.

The prediction came at a time of turbulence. The tweet itself attributed the drop to the regulatory and energy pressure stemming from Elon Musk's statements and the mining shutdown in China, and added a deeper reason: the seasonal weakness of June and, perhaps, July. In other words, the analyst acknowledged the bad moment and still kept his bullish chart for the second half of the year.

What is the S2F model and why is it credited with such accuracy

The method behind these figures is known as S2F, the stock-to-flow model, which relates the price of an asset to the scarcity of its supply. In Bitcoin's case, that scarcity is programmatic: issuance is cut every certain number of blocks. The model projects price based on that relationship between the accumulated stock and what is issued each year.

The financial community does not agree on its value. Some argue that S2F has correctly anticipated Bitcoin's major cycles and that its author has been getting it right month after month. Against it stands an argument that is hard to refute: a mathematical model, however sophisticated, can hardly predict the behavior of a complex system like an asset market. The reasonable doubt is not whether the model is elegant, but whether it succeeds by merit or by coincidence.

Survivorship bias: those who get it right and those who don't

Here comes the most uncomfortable argument for any guru. Every day, millions of people make price forecasts. Most fail and no one remembers them. Only those who get it right are looked at, and the rest are ignored. It is survivorship bias applied to finance: the same mechanism that means only the footballers who score goals are remembered.

The comparison with sport has a limit worth pointing out. Scoring goals depends largely on the player's skill. Predicting the price of a complex system, on the other hand, may be structurally impossible, so any success would be the result of chance rather than a repeatable ability. Those who defend the analyst reply that his track record is too long to be coincidence. Those who criticize him reply that the track record is built by selecting the successes.

The analyst remains bullish and points to gold as a benchmark

Despite the correction, the author has not moved his thesis. In a later tweet he acknowledged that part of the audience had lost faith in the bull market, but argued that the 2020-2024 cycle is only halfway through and that, although Bitcoin is experiencing turbulence around the one trillion dollar market cap mark, the target remains the gold cluster of data in the S2F60, around ten trillion. The small black dots in that comparison are gold data from 2009 to 2021.

The detail is telling: the analyst does not compare Bitcoin with another cryptocurrency, but with gold. The benchmark is not technological, it is monetary. That is the core of his bet, and also its weak point, because gold has industrial and electronic uses beyond its function as a store of value, whereas Bitcoin is a medium whose end is itself.

The criticism: maximalism disguised as technical analysis

The most repeated objection is not that the model fails, but that it is never required to fail. A Bitcoin maximalist is never asked for 85% drawdowns because their mental framework is that of digital gold. Their projections always point upward and do not contemplate a sustained bear market or a sell-off. The suspicion is that he does not analyze the chart, but uses the chart to justify preconceived ideas.

The contrast with other ways of investing is inevitable. Those who buy shares in a company look for a good entry and a good exit, to convert that into euros and buy houses, land or trips. Those who accumulate Bitcoin, on the other hand, practice a kind of bit collecting, willing to swallow 85% drops rather than sell. The debate over whether that is strategy or religious faith remains open.

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According to a comment on the forum, four days remain to reach the $98,000 mark for November, according to the original chart. The figure is written down and the calendar is running. What is not written down is what happens if it doesn't.