After $98k in November doesn’t materialize, PlanB discusses ‘first miss’
PlanB, the pseudonymous creator of the Bitcoin stock-to-flow model has been in the spotlight for the past few days. This was due to it becoming increasingly clear that Bitcoin wasn’t going to meet its November target of $98,000.
In fact, at press time, the king coin was flaunting a price of $57,300.91. However, a number of traders are still unaware of the fact that PlanB uses not one but three models to estimate the trajectory of Bitcoin.
Don’t misquote me
PlanB has previously explained that he uses S2F as a fundamental model, a price-based floor model, and other on-chain models. However, he tweeted that “trolls” were using the missed floor model to dismiss S2F itself.
During an episode of the Stephan Livera podcast, PlanB explained whether the floor model would get a second chance. He said,
“…I see that as an outlier and probably a V-shaped recovery after that. And then if that does not happen, so if we also miss the December [price], then the floor model is out of the window and broken. But a model – I think that’s a good point to make – a model is not broken by the first miss.”
He added,
“…it is a signal for me that something is going on, because this hasn’t happened in the last 10 years.”
Black swan, or swan song?
Experts have thrown around diverse possible causes for Bitcoin’s sliding price in recent weeks. Their conclusions ranged from the Omicron variant of COVID-19 and the Federal Reserve’s tapering decision to a possible bear market and market corrections.
For his part, PlanB called the November miss a “black swan event”– a shocking but very unlikely result that people try to justify with explanations later. About Bitcoin, he said,
“I don’t know why, by the way, I have no idea why the price went down last couple of weeks – could be the Mount Gox thing, could be just technical issues, [or] the consolidation after a big rise. It could be anything but I couldn’t point exactly what it is. But in my eyes, it’s an outlier.”
However, PlanB confirmed that his $135,000 floor model prediction for December was still in play.
It’s interesting to note here that William Lee of Huobi Research also proposed that the Fed’s decision to cut down on asset purchases would have an impact on Bitcoin – and its ability to rise. Lee also claimed this omission was the reason for PlanB’s S2F model failing.
See spot run
Apart from what investors might consider to be Bitcoin’s price woes, another matter of worry is the U.S. Securities and Exchange Commission’s (SEC) stance against Bitcoin Spot ETFs.
In a 29 November letter, Grayscale Investments warned about the dangers of being unfair when regulating different types of ETFs.
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Sahana Venugopal, Khareem Sudlow
