PlanB’s stock-to-flow model is well below plan. But the author still sees no reason to panic.
It’s getting tight: The benchmark for the validation of the Stock-to-Flow Model (S2F), arguably the hottest BTC price model on the market, is $ 100,000 by the end of the year. At the time of writing, BTC is trading at just over half that, or more precisely at $ 57,000. But the anonymous analyst is not throwing the gun in the towel that quickly. Discussed in the podcast with Stephan Livera PlanB Weal and woe of the S2F. But what exactly is the S2F model?
“The stock-to-flow models are fundamental models. Unlike other price-driven price models, they are based on fundamental data – in this case the scarcity, ”the analyst told Stephan Livera.
His floor model is also interesting. PlanB had thus often correctly predicted the “worst-case scenarios” in the growth of the BTC exchange rate – but in November it was spectacularly wrong. Instead of $ 98.0000, the BTC price only closed below $ 60,000.
Another point of contention in terms of stock-to-flow is the efficiency market hypothesis. Can the model become a self-fulfilling prophecy if enough traders act on it? Probably not, according to PlanB. “The market momentum is much more crucial. If the price goes down, investors sell, if it goes up, they buy. Even with 1.5 million followers, I have no influence on that. “
S2F (still) intact
Higher prices, in turn, lead to increased volatility – and at some point bring the price down again. A supercycle theory, i.e. the idea that BTC only strives upwards from a certain price level, cannot be made with PlanB:
“As soon as we hit the $ 100,000, Fomo will kick in. If the price then goes through the roof, people will eventually sell, that overheats the market. “
In other words: Supercycle theory is a nice idea, “but greed and fear are still opposed to it,” says the anonymous course analyst.
But is the model still correct despite the meager price performance? Yes and no. PlanB had said at the beginning of the year that the model would be invalid if BTC did not reach six digits by the end of the year. But in the podcast with Stephan Livera, the trader rows back.
The digital gold would only have to be worth over USD 100,000 on average, measured since it was halved. In other words: BTC can still make up for its underperformance if the price should rise significantly soon. But one thing is certain: it is slowly getting tight.