The creator of the Stock-2-Flow (S2F) model, PlanB, recently shared an intriguing question on Twitter, pondering the possible motivations behind the ongoing bullish momentum in the cryptocurrency market. Although the S2F model can be applied to all investment assets, PlanB is particularly focused on Bitcoin (BTC), which he believes is set to surpass $100,000 in the near future.
In his tweet, PlanB proposed that investors might be “front-running the halving.” Front-running is an investment term that signifies a strong motivation to purchase an asset based on foreknowledge that could drive up its value over time. PlanB was referring to Bitcoin’s halving, a network event that automatically occurs every four years.
The next halving isn’t expected until April of next year, when the rewards issued to Bitcoin miners will be cut in half from the current 6.25 BTC. Halving events are often followed by significant price growth, with investors typically accumulating the digital currency in anticipation of a price surge. PlanB’s question comes amid a broader recovery in the cryptocurrency market, which has pushed Bitcoin’s price to retest its crucial resistance level. At the time of writing, Bitcoin’s spot price has risen by more than 11% in the past 24 hours to $29,877.91, and the resurgence has also spurred altcoins to new heights.
The current Bitcoin price growth has prompted smart investors to inject new funds into the leading digital currency. This shift could be due to a recent wave of spot Bitcoin ETF filings sparked by BlackRock or the inherent potential of the upcoming halving – or perhaps a combination of both factors.
Bitcoin reached its all-time high (ATH) several months after its last halving in May 2020. As a similar growth spurt is expected to occur after the next halving, it’s possible that we’ll see even more smart money flowing into the market in the coming weeks and months.
Cryptocurrency investments are always influenced by market conditions, and it’s crucial to conduct thorough research before diving in. While PlanB’s question raises an interesting point, it’s essential to remember that the author’s opinions, like those of anyone else, could be shaped by personal biases and beliefs. As always with the crypto market, it’s vital for investors to assess the risks and potential rewards before making any financial commitment.
Source: Coingape
