- Stock-to-flow has been an extremely reliable predictor of Bitcoin’s price, and it suggests Bitcoin will be USD 100,000 before 2021 ends
PlanB, a crypto influencer who is the creator of the stock-to-flow Bitcoin price forecasting tool, has published Bitcoin price predictions for the next several years. He says that this year the price of Bitcoin will not drop below USD 8,200, and indeed the current stock-to-flow model price is USD 8,600. If correct, by the time the block halving happens Bitcoin will begin to lift off beyond USD 10,000, after which point the biggest bull run in history will happen with Bitcoin reaching USD 100,000 before the end of 2021. Ultimately, PlanB thinks Bitcoin will trade around an average price of USD 100,000 through 2024.
Stock-to-flow is actually comprised of just two simple parameters, the number of Bitcoins already available versus the number of new Bitcoins added to circulation. Since these parameters can accurately be projected all the way until the end of Bitcoin mining around the year 2140, stock-to-flow can be projected out as far as 2140 as well.
Actual price: $9,872.36
Model price: $8,606.72
S2F multiple: 0.14 pic.twitter.com/zVsto56pQH
— S2F Multiple (@s2fmultiple) February 11, 2020
A stock-to-flow calculation essentially produces a projected average Bitcoin price, with probability bands surrounding that. Notably, the price has stayed within the stock-to-flow probability bands for most of Bitcoin’s history, with the price going above the upper bound during rallies in mid-2011, early 2013, and late 2013, although the price has never gone below the lower bound.
Therefore, stock-to-flow seems to be quite accurate in predicting Bitcoin’s long term price movements, and if stock-to-flow continues to be accurate then a major Bitcoin rally should be underway within the next few months, and ultimately Bitcoin will go to all-time highs of USD 100,000 1 to 2 years from now.
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