- The stock to flow predicts the future price of Bitcoin ro be USD 288,000 based on changes in the flow of supply
PlanB, who is a crypto influencer and the creator of the stock to flow model, has created a new version of the stock to flow model, and it predicts Bitcoin will hit USD 228,000 in the years after the block halving.
The stock to flow model predicts the value of an asset based on its scarcity. Specifically, the total supply of the asset is divided by how much of the asset is created/mined within a year, and the higher this ratio is, the more scarce an asset is. For Bitcoin, stock to flow is calculated by dividing the total supply by the number of Bitcoins that are mined per year.
The Bitcoin block halving will cause the stock to flow ratio to increase significantly, from 25.1 to 56, indicating that Bitcoin will become far more scarce, and therefore far more valuable. It may take several years after the halving for Bitcoin to realize its full value potential, but ultimately the stock to flow model shows Bitcoin climbing to hundreds of thousands of USD.
Image Courtesy: Pixabay