The price of Bitcoin (BTC) surpasses the popular Stock-to-Flow model (S2F), which predicts that the BTC price will eventually reach $ 200,000.
The S2F model predicts the long-term price development of Bitcoin by taking two main factors into account, namely the amount of existing BTC (the stock) against the amount of newly mined coins entering the market (the flow).
Bitcoin is on its way to $ 200,000 based on S2F
According to the S2F multiple, the price of Bitcoin should be around $ 36,851 for the S2F model to be on the right track.
Due to the recent bull cycle and Bitcoin’s strong momentum, BTC / USD is now well above the S2F estimate of around $ 49,000.
Stock-to-Flow Multiple (463d)
2021-02-28, 23:59 UTC
ln (actual / model)
Actual price: $ 45,359.46
Model Price: $ 36,851.01
S2F multiple: 0.21 pic.twitter.com/rGgfgNmS3C
– S2F Multiple (@ s2fmultiple) March 1, 2021
Saifdean Ammous, famous author of Bitcoin standards, emphasized that Bitcoin has rarely deviated from the S2F model since it was created just over two years ago.
The accuracy of the S2F model so far suggests that the market recognizes the value of Bitcoin based on its shortage and growing demand. In addition, it highlights Bitcoin’s value proposition against the depreciating US dollar and the programmed reduction in flow (ie Bitcoin halves).
“PlanB released this model two years ago. Even after everything that has happened in bitcoin and the world in the last two years, the bitcoin market price has never deviated more than 1 standard deviation from the model’s predicted price.”
New orange dot: February closes $ 45,240! (Jan was $ 33,141 and current price is $ 46,500) .. like a clockwork pic.twitter.com/zcNuTVZQZx
– PlanB (@ 100trillionUSD) March 1, 2021
In mid-2020, PlanB said that Bitcoin could lose anywhere between $ 100,000 and $ 288,000 before December 2021. He said:
“People ask if I still believe in my model. To be clear: I have no doubt at all that #bitcoin S2FX is correct and #bitcoin will hit $ 100K-288K before Dec2021. I actually have new information that confirms that the shortage of delivery is real. IMO 2021 will be spectacular. Not financial advice! ”
BTC is used more than M1 USD
According to Willy Woo, a prominent analyst at the chain, Bitcoin’s monetary rate is higher than the US dollar’s M1.
This simply means that Bitcoin moves more value than the amount used to spend with the US dollar.
Such a trend indicates that Bitcoin is actively used as a means of transferring value and a store of value while developing into an established asset. Woo sa:
“Bitcoin’s monetary rate is now higher than M1 USD. M1 is USD held in short-term accounts to buy things; none of it moves. BTC makes a joke of it. BTC moves more than the money we have to spend. Nevermind BTC is for long-term investment. “
Bitcoin is currently considered a value store and a way to hedge against inflation. As the adoption of the dominant cryptocurrency as a means of payment and a settlement layer rises, it is likely to catalyze a second wave of mainstream adoption and use.
At that point, the value of Bitcoin may accelerate further and move in line with the S2F model when the next block reward is halved in about three years, materializing, which may move the BTC price further up the S2F curve.
Bitcoin could still see major price corrections, as it did many times under the current and previous bull cycles. But the S2F model will still be on track as long as the BTC / USD is within its range for short-term deviations.