Bitcoin has entered a positive feedback loop, is $100,000 just a matter of time?

The Bitcoin price started October 2020 at around $10.5K, but ended October at around $13.8K, an increase of +32%, and in early November it hit a two-year high of $15,000.

Some people seem surprised by the rise in Bitcoin’s price. In reality, this growth is not surprising and is simply the result of the consolidation of fundamentals that we have been witnessing for several months. It has been six months since the third Bitcoin halving, which took place on May 11, 2020. History tells us that this is precisely when the post-halving bull market begins to form. This time seems to be no exception.

It is essential to be a Bitcoin HODLer

The market has entered the accumulation phase of the early bull run, and various indicators show this, such as the number of Bitcoins that have not been moved in more than a year, or the number of Bitcoins stored on exchanges, which have been steadily declining since the beginning of 2020. More and more people are coming to the only valid conclusion about Bitcoin: Bitcoin is a monetary revolution that is designed to change the future of money.

The participation of large companies and institutions has put Bitcoin prices into a positive feedback loop

Nasdaq-listed MicroStrategy has made Bitcoin its primary reserve asset by adopting this strategy. Under the leadership of CEO Michael J. Saylor, MicroStrategy made two large BTC purchases in August and September. MicroStrategy has 38,250 BTC, purchased for $425 million including transaction fees. At the current Bitcoin price, MicroStrategy's investment is close to $530 million.

MicroStrategy’s strategy is excellent, and more and more companies will adopt this approach with Bitcoin in the future. Square did the same thing in early October 2020. The Bitcoin craze has already begun before our eyes, and nothing can stop it.

PayPal’s announcement to enter the world of buying and selling Bitcoin starting in early 2021 was the announcement that put Bitcoin into a positive feedback loop.

This positive feedback loop will help to boost the Bitcoin price to a new All-Time High (ATH) in the coming months. Don’t ask me for an exact date, I don’t have one. No one can give you exact information. The only thing I know for sure is that a new ATH for the Bitcoin price will be reached in the coming months. It’s just a matter of time now.

With more attention, the demand for Bitcoin is increasing. This is driving not only big companies, institutions, and individual investors to buy Bitcoin. Proof of this is the fact that Bitcoin has broken through the 100 million user mark a few weeks ago.

Demand will increase, but the supply of new Bitcoins will inevitably decrease over time

The demand is increasing, but the supply of Bitcoins is still limited to 21 million. In addition, according to the monetary policy defined in the Bitcoin source code, the issuance of new Bitcoins will continue to decrease in the coming years. This will lead to a sharp increase in the price of Bitcoin. As we have seen in recent months, the increase in the price of Bitcoin will lead to greater volatility and corrections from time to time. This volatility will lead to more and more talk about Bitcoin in the media.

This positive feedback loop will see Bitcoin prices rise sharply in the coming months, with the price of Bitcoin still slowly approaching the $100,000 predicted by famous analyst planbB by the end of 2021.

The theory behind the famous S2F is that as Bitcoin’s supply decreases over time, inflation will continue to rise. In theory, these two factors can amplify the top cryptocurrency’s upward trend.

Based on Bitcoin’s supply curve and halving cycle, S2F estimates BTC’s expected valuation at $5.5 trillion. The model predicts that Bitcoin’s market capitalization will reach trillions of dollars before 2024. The model’s content is as follows:

“The S2FX model estimates the next BTC phase/cluster (BTC S2F will be 56 in 2020-2024) to have a market value of $5.5T. This implies a BTC price (19M BTC in 2020-2024) of $288K.”

PlanB said in a tweet that he still believes the S2F model’s $100,000 price prediction for Bitcoin will come true in 2021.

2021 is particularly important for Bitcoin as it follows the much-anticipated block reward halving in May 2020. Six months ago, Bitcoin underwent the third halving in history. This cut the number of BTC mined per day in half, which will cause the circulating supply to decline over time. The analyst wrote:

“People ask me if I still believe in my model. To be clear: I have no doubt that #bitcoin S2FX is correct and Bitcoin will hit $100k by Dec 2021. In fact, I have new data that confirms the supply shortage is real. 2021 is going to be big. This is not investment advice!”

Bitcoin supply is less than 21 million

Willy Woo, the creator of Woobull.com, mentioned that the total supply of Bitcoin is lower than people often think. Although the total supply of Bitcoin is 21 million, there are still a large number of lost or dormant Bitcoins that can no longer be spent. Willy Woo said:

“The total supply of Bitcoin will not be 21 million, but about 17 million, as many Bitcoins were lost in the battle to be considered valuable in the early days. This means that every person on Earth will only have 0.002 BTC.”

in conclusion

While the logical next bear market correction phase will be in 2022 and 2023, you should keep in mind that we are about to enter a new 4-year cycle, starting with the fourth Bitcoin halving in 2024. With each new cycle, the supply of new Bitcoins will be halved.

All of this being said, the demand for Bitcoin will continue to grow strongly, and the Fed will continue to print more and more dollars out of thin air. In this scenario, Bitcoin's 10-year price target will be higher.

If you are a Bitcoin hodler, you can sleep soundly, your best days are just around the corner. If you still think Bitcoin is a scam, please educate yourself and learn about Bitcoin before you miss out on the opportunity of a lifetime.