The launch of a new project from Ethereum, bitcoin price predictions, and the cryptocurrency market situation

​The Stock to Flow model failure and the review of the key events. Summing up the results of the past week

03.12.2021 - 14:00


4 min

The past week was marked by the relative stability of the first cryptocurrency. For example, the asset has gained just over 3% in the last seven days and is currently trading around $56 600. The second most capitalized cryptocurrency, Ethereum, grew by 11,1%, and one of the growth drivers was Vitalik Buterin's announcement that a perfect new blockchain, Beacon Chain, based on the Proof-of-Stake algorithm, will soon be launched. The creator of Ethereum also published a detailed roadmap of the new project with all the stages of further development.

Binance Coin also gained in value, trading at around $619, up 6,1%. The Binance's founder this week noted that he bought the real estate in Dubai and did not rule out the opening of the exchange's head office in the emirate.

As for the three outsiders, GALA (-17,5%), IMX (-15,6%) and WAX (-15%) showed the largest declines. For GALA, the drawdown was an expected correction after an impressive 63,4% growth in the previous week.

The total crypto market capitalization was virtually unchanged over the week at $2,617 trillion, with bitcoin dominating at 40,9%. According to the Coin360 portal, the overall market backdrop for the week remained in the green zone.

Source: Coin360

Bitcoin predictions do not come true

The well-known analyst PlanB applied the Stock to Flow model to bitcoin and calculated the options for the cryptocurrency's exchange rate movements. However, he had to admit that after the three accurate predictions for August, September, and October, the model failed in December. Thus, according to his calculations, the price of the asset was expected to approach the $98 000 mark. Regardless, PlanB is still confident that bitcoin will reach $100 000 per coin sooner or later.

Source: Twitter

The well-known trader Nicholas Merten predicts a long flat period for the first cryptocurrency. In his opinion, bitcoin may not start its rise until March 2022 and reach the $100 000-$200 000 mark.

What other events have affected the market?

The stance of the regulators on bitcoin may become an obstacle to its further growth. Thus, this week, the Securities and Exchange Commission Chairman Gary Gensler called bitcoin a competitor to the US banking system that may undermine its stability. He said the cryptocurrency poses a threat to anti-money laundering and counter-terrorist financing measures. At the same time, the SEC has no plans to ban bitcoin yet.

Noteworthy for the further development of the digital currencies was the lifting of a ban on the advertising crypto projects by Facebook. According to Henry Love, a former employee on Facebook's small business team, the company's new policy will allow more retail investors to access cryptocurrencies than ever before:

“With more openness and transparency for what crypto companies can do, we will see more adoption for the cryptocurrency industry and the metaverse than ever before. This is a game-changer for mass adoption.”

In Russia, the situation remains unchanged. The regulators are in no hurry to help the development of the crypto industry, and Vladimir Putin called this asset type “risky to use.” Despite the criticism of cryptocurrencies, Putin added that the market may become more stable in the future and it is necessary to follow the development of the technologies.

The discussions on mining continue as well. The authorities plan to equate this activity with entrepreneurship one and set business tariffs for it, which are significantly higher than the prices paid by ordinary citizens.


Michael Golikov Michael Golikov

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