The price of Bitcoin (BTC) exceeds the popular Stock-to-Flow (S2F) model, which predicts that BTC will eventually reach $ 200,000.
The S2F model predicts the long-term evolution of Bitcoin’s price by considering two main factors, namely the amount of BTC in existence (reserves) versus the number of recently used coins entering the market (flow).
Bitcoin Approaches $ 200,000 Based on S2F
According to S2F Diversity, Bitcoin needs to hover around $ 36,851 for the S2F model to be on the right track.
Due to the recent bullish cycle and the high speed of bitcoin, the BTC / USD rate is now well above the S2F estimate of around $ 49,000.
Saifdin Ammous, author of The Bitcoin Standard, argued that Bitcoin has rarely deviated from the S2F model since its inception more than two years ago.
The accuracy of the S2F model at this point indicates that the market is recognizing the value of Bitcoin based on scarcity and increased demand. Moreover, it highlights Bitcoin’s value proposition against a backdrop of a weak US dollar and a programmed decline in flow (i.e., Half Bitcoin).
“PlanB released this model two years ago. Even after everything that has happened in Bitcoin and in the world over the past two years, the market price of Bitcoin has never deviated by more than one standard deviation from the expected price of the model. ”
As Cointelegraph previously reported, the creator of S2F Plan B said he had no doubt that Bitcoin’s price would hit $ 100,000 by December 2021 based on the model.
In mid-2020, PlanB stated that Bitcoin could hit $ 100,000 to $ 288,000 by December next year. He said:
“People ask if I still believe in my model. To be clear: I have no doubt that #bitcoin S2FX is correct and that #bitcoin will reach $ 100,000-288,000 by December 2021. I already have new evidence to prove that supply shortages are real. IMO 2021 promises to be awesome. Not financial advice! ”
BTC uses more than M1 USD
According to Willie Wu, senior network analyst, Bitcoin’s cash rate is higher than $ 1.
It simply means that bitcoin is moving in more value than the amount used to spend in US dollars.
This trend indicates that Bitcoin is being actively used as a medium of value transfer and as a store of value at the same time, as it turns into a stable asset. Woo sa:
“The cash price of bitcoins is now higher than M1 USD. M1 is the US dollar that is held in short-term accounts to buy things. None of them move. BTC is a joke. BTC is moving more money than we should be spending. For long-term investments. ”
Bitcoin is currently a valuable store and a way to hedge against inflation. When the prevalence of the dominant cryptocurrency as a means of payment and settlement increases, it is likely to spur a second wave of normal adoption and use.
At this point, the value of Bitcoin may accelerate further and move in line with the S2F model, with the next block reward halving in about three years, which could cause the BTC price to move up the S2F curve.
Bitcoin can still see significant price adjustments as it has several times during the current and past uptrend cycles. But S2F will stay on track as long as BTC / USD remains within its short-term divergence range.