PlanB, the popularizer of the Bitcoin S2F method, claims that the model predicts that BTC would surpass $ 100,000 by Christmas.
The Bitcoin Stock to-Flow Model
PlanB, a Twitter account, predicts that the stock to-flow BTC model (or S2F as it is commonly known) will see the cryptocurrency surpassing $ 100,000 by Christmas.
The S2F Model is a method to predict the price an asset’s value based on the ratio between supply (stock) and flow, or annual production.
PlanB is often thought to be the original creator of the model. This is however false. The method was already being used for other assets, such as gold or silver, before the analyst made it popular for Bitcoin.
The S2F value can be used to show how rare a commodity is. This model uses a formula that relates this value to the asset’s price, which in this instance is BTC.
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Here is a chart showing how the BTC price has changed over time compared to what the model predicted.
The chart above shows that the predicted price of Bitcoin is remarkably close to what has actually happened.
There are some exceptions, but the general trend seems quite similar. If the price follows the trend in the future, then the value of Bitcoin will rise soon and reach over $ 100,000 by Christmas.
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In the graph, you can also see the time model curve. This “Time Model” is a method that takes into account diminishing returns and lengthening cycles while predicting the price.
This alternative model predicts that the price will be around $30,000 by Christmas. PlanB believes that this method underestimates Bitcoin’s value and the S2F model is better.
Bitcoin’s price is currently at $ 47.8000, down 4% in the past seven days. The price of Bitcoin has risen 14% over the past month.
The chart below shows the change in the coin’s price over the past three-months.
Source: BTCUSD| Source: BTCUSD on TradingView
Bitcoin’s price has fallen sharply since yesterday’s crossing of the $ 49,000 mark. It appears that the cryptocurrency is in an upscale marketplace as its current price hovers between $ 45,000 to $ 50,000.
It is not clear where BTC might go next. However, if the S2F model holds true, the crypto may gain momentum and could reach $ 100,000 by Christmas.
Featured image from Unsplash.com. Charts from PlanBTC.com. TradingView.com.