BTC Long term outlook
There seems to be a lot of uncertainty in the market right now, so I decided that I should write a few things to help put things into perspective. Whenever we get in scary moments like these, I like to look at the long term picture of things to see where we're at in the overall cycle. Technically speaking, there is good long term support at the current levels. Raoul Pal also just gave a presentation recently to about 3000 institutions regarding BTC, so you know there is a lot of institutional interest right now to hop on board.
Whenever you invest in an asset, you should always first look at the numbers and see if they make sense. After that, you gotta look at the fundamentals to see where it can be in the future. With that being said, during the last couple of cycles, the numbers played out interestingly enough, such that, Plan B applied the stock-to-flow model on BTC and saw a lot of significant things. The numbers played out and targets were not only hit, but surpassed. But this was before this model became widely known, to the point where it's basic knowledge not only among institutional investors, but also many retail investors.
So we must consider our current circumstances now, in order to get a better projection for the price of BTC this cycle. We have to see if there is any reason why BTC should go higher than the predicted 80-ish k (lookintobitcoin.com/charts/stock-to-flow-model/). One possible reason is that the Fed recently stated that they won't even think about lowering rates until 2023. For those of you who don't know what this means, it's basically super fucking bullish. Another reason lies in another model, the stock-to-flow cross asset model, which was also developed by Plan B (stats.buybitcoinworldwide.com/s2fx/). Basically, it just compares BTC to other assets like gold or silver and projects what BTC would be if it had a similar market cap. So another way of viewing this (where you could think of the total amount of BTC * its current price) as demand that's priced in already, you could draw the conclusion that if we had demand coming from these assets, we could reach even higher but too a limit of course. And so that's basically how that works.
Now you're thinking, "holy shit! does that mean it's gonna hit 288k?" which is where it projects BTC to be at the end of this cycle.
Doing your due diligence means thinking critically in situations like these, so if you wanna challenge yourself, take a minute to think about what is the "catch" to all of this.
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Alright you're back? The catch is if the money from gold or silver will actually flow into BTC! The model is only right if the money is coming in. So it becomes a watching and a selling game for institutions: watching how many other people buy (remember Michael Saylor?) and selling it (the idea of buying it I mean) to other institutional investors when you want it to have strong support at certain levels, so things still "technically" look okay to everybody else in the long term. That's how it works when you play the game, so you got to get in that mindset if you want to win (not like I'm saying Raoul is actually trying to sell a support level, but rather it's just something that people do intentionally or rather naturally because interest from institutions usually comes around these times).
With all that being said, watching gold fall a shit ton in the past few days unexpectedly (also because of some news from China, go figure), has got me really suspicious, in a bullish way. I don't know if the money is actually flowing from gold into BTC, but if I was an institution who could make the switch, I absolutely fucking would.
I hope this helps you all keep in mind the different players involved and how you should balance the numbers with the news.
If this made you laugh, please spread it around and make someone's day. Or if you felt like you learned something, feel free to thank me in the comments below.
May God be willing,
- LB
Whenever you invest in an asset, you should always first look at the numbers and see if they make sense. After that, you gotta look at the fundamentals to see where it can be in the future. With that being said, during the last couple of cycles, the numbers played out interestingly enough, such that, Plan B applied the stock-to-flow model on BTC and saw a lot of significant things. The numbers played out and targets were not only hit, but surpassed. But this was before this model became widely known, to the point where it's basic knowledge not only among institutional investors, but also many retail investors.
So we must consider our current circumstances now, in order to get a better projection for the price of BTC this cycle. We have to see if there is any reason why BTC should go higher than the predicted 80-ish k (lookintobitcoin.com/charts/stock-to-flow-model/). One possible reason is that the Fed recently stated that they won't even think about lowering rates until 2023. For those of you who don't know what this means, it's basically super fucking bullish. Another reason lies in another model, the stock-to-flow cross asset model, which was also developed by Plan B (stats.buybitcoinworldwide.com/s2fx/). Basically, it just compares BTC to other assets like gold or silver and projects what BTC would be if it had a similar market cap. So another way of viewing this (where you could think of the total amount of BTC * its current price) as demand that's priced in already, you could draw the conclusion that if we had demand coming from these assets, we could reach even higher but too a limit of course. And so that's basically how that works.
Now you're thinking, "holy shit! does that mean it's gonna hit 288k?" which is where it projects BTC to be at the end of this cycle.
Doing your due diligence means thinking critically in situations like these, so if you wanna challenge yourself, take a minute to think about what is the "catch" to all of this.
---
---
Alright you're back? The catch is if the money from gold or silver will actually flow into BTC! The model is only right if the money is coming in. So it becomes a watching and a selling game for institutions: watching how many other people buy (remember Michael Saylor?) and selling it (the idea of buying it I mean) to other institutional investors when you want it to have strong support at certain levels, so things still "technically" look okay to everybody else in the long term. That's how it works when you play the game, so you got to get in that mindset if you want to win (not like I'm saying Raoul is actually trying to sell a support level, but rather it's just something that people do intentionally or rather naturally because interest from institutions usually comes around these times).
With all that being said, watching gold fall a shit ton in the past few days unexpectedly (also because of some news from China, go figure), has got me really suspicious, in a bullish way. I don't know if the money is actually flowing from gold into BTC, but if I was an institution who could make the switch, I absolutely fucking would.
I hope this helps you all keep in mind the different players involved and how you should balance the numbers with the news.
If this made you laugh, please spread it around and make someone's day. Or if you felt like you learned something, feel free to thank me in the comments below.
May God be willing,
- LB
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