Will PlanB’s Stock-to-Flow Model Deliver On Bitcoin Price Prediction?

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Will PlanB’s Stock-to-Flow Model Deliver on Bitcoin Price Prediction?

Bitcoin price predictions vary from zero to prices so high few of us find it hard to comprehend. And no price predicting model is as popular or as critiqued as PlanB’s Stock-to-Flow.

But will the S2F model deliver on its Bitcoin price prediction? Or is the pseudonymous analyst injecting us all with a serious dose of hopium?

As of now, the model is perfectly on track, and the model’s creator, pseudonymous quant analyst, PlanB, recently doubled down his conviction, tweeting he had ‘no doubt whatsoever’ that the S2F model would deliver.  

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PlanB said the S2F model was on track, and would meet his Bitcoin price prediction of somewhere between $100k and $288k by December 2021. ‘IMO 2021 will be spectacular,’ were PlanB’s last words on the matter.

What is The Bitcoin Stock-to-Flow?

The Bitcoin Stock-to-flow is a price analytical model that leverages Bitcoin’s stock and flow. The ‘stock’ to ‘flow’ is determined by evaluating the number of years it would take to mine the circulating supply at the current production rate.

The higher the number of years, the higher the expected BTC price will be.

Stock-to-Flow models are used with scarce assets such as gold, silver and platinum. And because Bitcoin is even more provably scarce, the S2F model has been used to try and discern the price pattern Bitcoin will take.

Gold, silver, platinum and Bitcoin are all ‘store of value’ assets because they retain their value over a long period of time.

This is because all scarce assets are difficult to significantly increase the supply. And in Bitcoin’s case, it’s pretty much impossible to change the trajectory of the increase in supply.

So the stock-to-flow model can definitely be used with Bitcoin.

PlanB Is Confident in S2F But Not Everyone Is

PlanB and many other leading names in the Bitcoin space are confident the S2F model will play out. The likes of The Bitcoin Standard author Saifedean Ammous, Preston Pysh, and Jeff Booth have all gotten behind it and believe the S2F model will deliver.

Even though PlanB is extremely confident, the quant analyst does admit the S2F model will fail one day. He just doesn’t believe it will fail in this halving cycle.

Models are there to help analysts gage a Bitcoin price prediction. They all will almost certainly fail eventually, but there are many who doubt the S2F model already.

$1 Million Bet On The Model Failing

There are some serious doubters about the S2F model working. Timothy Peterson, Global Macro Manager at Cane Island Alternative Advisors, regularly dismisses S2F on Twitter and has instead come up with his own model based on Metcalfe’s Law.

Peterson published the model in an 80+ page academic paper back in 2018. Titled Metcalfe’s Law as a Model for Bitcoin’s Value the model suggests a Bitcoin price prediction of $100k by January 2024.

Bullish indeed but it falls short of PlanB’s price prediction. And there are others even more critical of the S2F model.

Eric Wall, CIO of crypto hedge fund Arcane Assets, has offered anybody a $1 million bet that the PlanB’s Stock-to-Flow model will fail by 2025.

Wall’s bet is open to anybody who is willing to accept, ‘I bet $1,000,000 that the S2FX model will be broken less than 5 years from now,’ said Wall. ‘This is not a joke. I’m willing to lock up the money for it with a 3rd party we both trust, and you must too. I define “broken” = “it won’t have reached even 50% of its target range”.’

Eric Wall has been a long-standing critic of the Stock-to-Flow model and claims Bitcoin’s ‘hard-coded digital scarcity, may not be mathematically sound.’

Wall says the alternative Bitcoin price prediction model, dubbed the Reddit Rainbow chart, offers a better model for predicting Bitcoin’s price trajectory.

The chart dates back to 2014, and the creator, Redditor u/azop has regularly updated the chart in the /r/BitcoinMarkets subreddit.

Coincidently, the chart appears to follow a similar trajectory to Timothy Peterson’s Metcalfe’s Law model.

Will PlanB’s Stock-to-Flow Model Deliver?

The Bitcoin S2F model is the most popular Bitcoin price prediction model, and there are many big names and Bitcoiners fully behind it.

Hopium? For some, no doubt, but the likes of Preston Pysh, Saifedean Ammous and Jeff Booth have done the figures and are fully behind it.

Some say when the S2F does fail, it’s likely to fail to the upside.

But with every popular trend, comes critique, and these analysts have equally convincing cases that they and their models are right.

If the Bitcoin Stock-to-Flow delivers, we should get a Bitcoin price of somewhere near $288k in the next 14 months or so. I’d be happy with that.

If PlanB is wrong, and the others are right, then we might see a more conservative $50k in the same time period. Id’ also be happy with that.

Analyzing markets and assets is a tough sport, and Bitcoin price predictions are mostly wrong, or should that mean ‘early’. We wait with baited breath.


Please be advised that the contents of these posts are not to be construed as investment advice. While some of our contributors may be price analysts, their opinions and analyses are personal views and are shared with the intention of promoting discourse and understanding.

Always conduct your own research and consult with a professional financial advisor before making any investment decisions. The Bitcoin market can be volatile, and past performance is not indicative of future results. Invest at your own risk.

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