BTC - What happens when bitcoin breaks S2F to the upside?
Bitcoin predictions offer plenty of excitement, but one in particular really stands out...
If you have followed my blog for any length of time you have likely heard/read about bitcoin's stock to flow model (S2F).
The stock to flow model is a method used to predict the value of a commodity (like gold, silver, or bitcoin) by determining the asset's scarcity.
The formula to determine its scarcity is a simple one.
Just get the amount of the commodity in inventory (its supply) and divide it by the amount mined or produced every year.
With bitcoin that is supper simple because we know the inventory and we know the future emission rates.
This model is especially exciting to me because it has remained extremely accurate with forecasting bitcoin prices, possibly better than anything else.
The stock to flow model is about to get very very interesting...
For bitcoin, the stock to flow model is about to get very interesting.
Bitcoin's price moves very much within its stock to flow model predictive bands.
If bitcoin's price continues to remain within the projected model, prices are going significantly higher over the next couple years.
Check it out:
(Source: https://twitter.com/100trillionUSD/status/1199744234791804930
As you can see the price has so far stayed mostly within those predictive bands and the next couple years predict much higher prices.
The model is showing that sometime between 2020 and 2022, bitcoin should have gotten very close to $100k.
Wowza.
But what happens when bitcoin breaks the model to the upside?
Notice how I said "when" in that question above?
In all 3 of the previous bull markets, bitcoin broke the predictive bands to the upside during it's most bullish euphoric phase.
Interesting...
If that were to happen again, then not only would we expect prices to be around $100k within the next 2 years, but we would actually expect them to overshoot that number during the euphoric phase.
Possibly significantly.
How's $100k bitcoin as a baseline sound over the next 2 years?
It sounds pretty awesome to me!
Stay informed my friends.
-Doc
Need to break so many resistence to go 100k.First btc has to touch 20k again.May be it will happen 2020.
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Technically, once bitcoin breaks $20k it will be all blue skies since it has never traded above there. :) But yes, we are a long ways from those massive numbers mentioned in the post.
It will be easier going past 20K then going back past 10K I would bet.
I could see that. I think if prices can break about $14k, then $20k will work like a magnet pulling prices towards it.
I think after we are past the lowest lows, $14k is quite realistic... When people get their tax returns, a lot will invest them in cryptos and that means trading volume for BTC...
I've relied on the Stock-to-Flow model for a lot of my price predictions, and it's been very accurate thus far, as it stayed within the zones. It'll be most interesting to see how it'll look like at the end of 2019. That'll somehow calibrate my expectations going into halving 2020.
I am most interested to see 2020-2022 to see if it can remain within those bands.
Agreed. Near, or Post-Halving 2020 will be an interesting time to properly validate the S2F model. If it stays that way, then it'll be an interesting bull-run to keep an eye onto triple digits.
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