The well-known analyst PlanB has made some adjustments to his stock-to-flow model to come up with a new prediction for the bitcoin price.
The price of the flagship cryptocurrency may reach a heartwarming $288,000 by 2024, according to PlanB’s improved model known as the Bitcoin Stock-to-Flow Cross Asset Model.
Re-modelling Bitcoin Price Trajectory With The Stock-to-Flow Cross Asset Model
Bitcoin market analyst PlanB has published a new article explaining his new stock-to-flow cross-asset (S2FX) model. This model takes into account the idea of phase transitions.
To better understand bitcoin’s phase transitions, PlanB illustrates how water changes states (phases) at different temperatures. It remains water, but it has different properties at each phase.
The same goes for bitcoin (BTC). Bitcoin narratives have dramatically changed over the past 11 years. PlanB noted that the narratives for the top cryptocurrency have changed with financial milestones, and combining this with the stock to flow produces notable phases.
He quips that bitcoin has undergone 4 phase transitions so far beginning with the proof of concept narrative after the release of the white paper, then its use as a reliable means of payment followed by the digital gold narrative that emerged after the first halving, and lastly the financial instrument narrative that first emerged in 2016.
PlanB then identifies four bitcoin clusters that are consistent with the 4 phases and the halvings. Each of these clusters has a different S2F market value combination. The analyst then introduced other assets like gold and silver to the model to make it a true cross asset model.
The main difference between the original S2F model and this new S2FX model is the fact that PlanB only used silver and gold’s S2F and market value data for the regression analysis in the S2F model. With the S2FX, however, he incorporates the S2F and market value data of the four bitcoin clusters and gold and silver to make it a total of six assets.
Bitcoin Price Will Top $288,000 By 2024
Presumptive price predictions always draw the attention of the crypto community. In the last three years or so, they have ranged from a fall to zero from the cryptocurrency skeptics to an outlandish two million price tag from the controversial John McAfee.
The latest prediction is a modification of the celebrated stock-to-flow model by analyst PlanB, as explained above. The S2FX model has been used to estimate the market value of the next BTC phase.
A bold forecast has been made using this model:
“BTC S2F will be 56 in 2020-2024. This translates into a BTC price (given 19M BTC in 2020-2024) of $288K.”
PlanB acknowledges that this new prediction is remarkably higher than the $55K forecast in the original S2F model. To put it into perspective, his original model placed the BTC price at $55,000 by 2024. The updated S2F model projected $100K per BTC during the same timeframe.
PlanB has clearly upped the ante with the new S2FX model. He, however, notes that this new model is in its initial stages as it has not yet been recreated or reviewed by others.
Ultimately, this is just another price model but it does suggest that the bitcoin price could be gearing up for a much higher valuation in the coming years.
It should be noted that PlanB’s stock-to-flow model has had more than its fair share of critics including Ethereum’s Vitalik Buterin who termed it as “rationalized bullshit”.