Bitcoin’s price is the furthest it’s ever been from the well-known Stock-to-Flow model’s estimate, proposed by anonymous trader PlanB.
According to data from Glassnode, Bitcoin’s deflection from the S2F model is at an all-time low. If the price had continued on track as per the model, Bitcoin would have currently been trading at around $109,000.
Based on the @100trillionUSD stock-to-flow (S2F) model, #Bitcoin's current price is around $109,000.
While the prediction is currently 85% off – it has been highly accurate in the past.
Its creators are suggesting it is expected to bounce back. Do you think it's still valid? pic.twitter.com/j7065dLKx6
— Not Fungible (@NotFungible) January 2, 2023
The S2F model values Bitcoin based on the relationship between its current supply and the rate at which more coins are minted. The scarcity-based model suggests that a higher S2F ratio should imply a higher price of Bitcoin. Essentially, decreased supply and increasing demand would see the value of the digital asset surge higher.
The model’s creator, PlanB, gained popularity after the prediction model delivered fairly accurate results for the better part of its existence. Still, even with Bitcoin’s price currently being far below S2F’s estimates, PlanB believes in his model’s accuracy.
In a Dec. 8 interview with Scott Melker, PlanB said that although Bitcoin’s price is now three to four times below S2F’s estimates, it has been ten times higher than model price in 2013.
“Did it fail back then? No. It [Bitcoin’s price] crashed down back to the model price,” said PlanB.
In a chart shared on Monday, PlanB referred to Bitcoin’s price relative to its realized cost price, five-month realized price and two-year realized price as “clockwork.” Some market participants disagreed with his thesis, saying the model had hardly been accurate in 2022
'like clockwork' refers to perfection. U used it correctly when your btc prediction was right on track to 100k or 288k in 2021. Nothing perfect for btc for over a year and probably for the year to come. Bottom seems close, that's not 'like clockwork' now, is it?
— tonychocolonely (@TonvanderHeyden) January 2, 2023
However, some of his followers have remained unfaltering proponents of the model, saying that 2022 was merely a “broken cycle” on the way to the real target.
Broken cycle indeed, thanks to China mining ban, Luna/Terra, FTX/SBF.
— PlanB (@100trillionUSD) January 1, 2023