As Bitcoin’s price holds steady at nearly $8000, and Bitcoin futures show healthy value, new numbers are rising for future Bitcoin value projections from something called stock-to-flow.
A stock-to-flow model as presented by BB at cointelegraph measures value in terms of existing supply and predicted mining or generation.
“Stock-to-flow calculates a value based on the supply of new Bitcoins entering circulation through mining versus the existing supply, or ‘stock,’” Suberg writes, citing a post by analyst PlanB. “The retroactive application confirms that the model is extremely competent at charting Bitcoin’s growth, with even last month’s 60% drop still falling within its predicted range. Prior to S2FX, an “updated” stock-to-flow chart put BTC/USD at an average of around $100,000 between 2020 and 2024. With the release of the new version, however, the prediction has almost tripled overnight.”
In a piece on Medium, PlanB shows how the addition of precious metals to an existing model yields the S2FX projection:
“In this article I solidify the basis of the current S2F model by removing time and adding other assets (silver and gold) to the model. I call this new model the BTC S2F cross asset (S2FX) model. S2FX model enables valuation of different assets like silver, gold and BTC with one formula.”
Citing a number of “phase transitions,” PlanB then lays out how estimates arrived at a number of $288,000 by 2024, a nearly 300% increase from prior projections.
“Please be aware that the S2FX model is a first step that has not yet been replicated and reviewed by others,” the author writes.
Take all of this with a grain of salt, but the math is there. Analysts are suggesting the halving event next month may also be baked into price projections. We’ll see.