A new spin on the Bitcoin stock-to-flow (S2F) model suggests the crypto king will blow past $ 520,000 – but it may take a while.
A pseudonymous quantitative analyst called QuantMario says PlanB’s popular S2F ratio, which divides the amount of BTC in circulation by the amount of Bitcoin won per year, is overly optimistic.
“After its fifth halving in about eight years from now, the original S2F model predicts that Bitcoin’s market capitalization will exceed the value of all the real estate in the world: stocks, real estate, fiat money, gold, etc. Sounds impossible ? Turn right.”
Crypt∞li, an editor at the crypto exchange startup SAFEX, says The new model, which shows that BTC will make a slow and steady advance to approximately $ 520,000 over the next two decades, places more realistic expectations about miners’ profitability and overall electricity use on the grid.
“The output of the S2F model basically requires a 10x price increase from one cycle to the next. Assuming constant profitability of miners (equilibrium of price and adoption of miners), mining efforts should increase fivefold every four years – the combination of a tenfold increase in price and a halving of the block reward results in a fivefold payout in fiat currency every four years. “
To address these issues, the modified S2F model predicts a significantly slower growth rate for BTC.
In contrast, the PlanB model predicts that Bitcoin will reach $ 1 million by 2028.
Despite its adjustments, QuantMario admits that the PlanB model closely follows Bitcoin’s price movements in the past, and if this continues, a much larger rally will follow in the coming years.
“In the past three halving cycles, each has created a price bubble that has briefly exceeded the margin of error of the LGS-S2F model. If this happens again, we can expect the price peak to hit $ 100k in the coming cycle. ”
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