The price of Bitcoin continues to behave erratically as the stock market continues its plunge. Although the price of Bitcoin currently sits more or less stable above $5,000, analyst Tone Vays suggest it could fall. In fact, Vays says that Bitcoin hitting $2,800 isn’t “scary”.
Vays argues Bitcoin has a price floor around $2,000
Specifically, these recent comments from Vays came during his latest edition of the Trading Bitcoin YouTube series. In it, Vays said that he currently envisions a price floor for the premier cryptocurrency around $2,000.
Although this could sound extreme to crypto and Bitcoin bulls, Vays is quite calm. The reason for this is that the price floor of around $2,000 will increase following the Bitcoin halving in May. As Vays puts it, the price of Bitcoin could fall to half its current levels without any reason for panic.
Instead, Vays argues that the upcoming Bitcoin halving will improve Bitcoin’s fundamentals. As anyone keeping tabs on the Bitcoin halving will know, it will effectively cut future Bitcoin supply in half. As such, Vays does not believe $2,000 Bitcoin is “scary” as long as it happens before the halving:
“It’s scary after the halving – it’s not scary before the halving. In fact, I always anticipated it before the halving, so it’s getting there, even if it’s a few weeks before the halving, I am perfectly fine with it.”
Last week’s drop was likely low “enough”
Vays also believes that Bitcoin levels in the $2,000 range would be in line with a 80% price drop forecast. Specifically, this forecast says that Bitcoin’s price would fall by 80% from its 2019 high of roughly $13,800. However, Vays also notes that last week’s brief low of $3,700 was likely “close enough”.
Industry spectators more or less unanimously agree that the Bitcoin halving could drive Bitcoin prices higher. The perhaps most central predictor of this is the stock-to-flow (S2F) model, which prices assets according to the future supply of the asset.
As the Bitcoin halving will – as the name suggests – reduce Bitcoin mine rewards per block by half. Consequently, supply and demand mechanics suggest this will double Bitcoin’s future price, seeing as the future supply falls by 50%.
Nevertheless, the past weeks’ financial instability is impacting the crypto markets. The growing stock market uncertainty has analysts talking about other things than the Bitcoin halving – but it will still happen.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.