Blind Faith in S2F Models: Analysts Question Measuring Bitcoin’s Price With Stock-to-Flow

One of the most bullish charts for predicting the price of bitcoin is the infamous stock-to-flow (S2F) model. The S2F analysis shows the price of BTC could reach $55,000 in the near future. One advocate of the S2F model, the Twitter account known as ‘Plan B,’ wrote a report about the subject and the article was extremely popular and translated into multiple languages. However, skeptics believe the S2F model is faulty and it’s most prominent supporter has said S2F is not entirely accurate, but “an order of magnitude right.”

Also read: Evidence Shows Politicians and Wall Street CEOs Expected the Market Crash Well Before Covid-19

Can We Measure Bitcoin’s Value with Scarcity? Stock-to-Flow Model Suggests Its Possible

There have been hundreds of bitcoin price predictions over the last decade, but most of them stem from people pulling numbers out of thin air. Even when a myriad of analysts and crypto luminaries pick digital currency prices out of a hat and get it wrong, no one really cares. Although, there are a few models and charting techniques that many strategists and traders wholeheartedly believe in, like the signals from Bollinger Bands and Elliott Wave Theory. The analyst known as Plan B (@100trillionusd) has popularized the stock-to-flow (S2F) model, which measures the price of BTC using the number of coins in circulation and the flow or issuance rate. Plan B’s editorial called “Modeling Bitcoin’s Value with Scarcity” has gone viral and has been translated into a variety of different languages.

Blind Faith in S2F Models: Analysts Question Measuring Bitcoin's Price With Stock-to-Flow
Precious metals have been measured with stock-to-flow models for years. Plan B’s popular post called “Modeling Bitcoin’s Value with Scarcity” shows how BTC is the first scarce digital object known to man.

Essentially, S2F divides abundance with demand by treating BTC like commodities such as gold or platinum. So any analyst can use the model to evaluate the current BTC in circulation against the number of coins…

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