BTC on the way to $50,000? – Bitcoin is above stock-to-flow

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Bitcoin was ready to assert itself directly within the first weeks of the New Year. The BTC price rose by quite 25% within the first days of January and was ready to leave the USD 9,000 barrier behind. for a few days now, however, the BTC has been moving sideways and thus offers tons of room for a few old coins, many of which have experienced extreme price rises. How does BTC continue? is that the stock to flow, model, still valid or can we need to discard the model? we’ll take a quick check out the established order of Bitcoin.

BTC soon as ‘hard’ as gold

The Bitcoin Halving is perhaps the foremost important event of BTC. Every four years or rather every 210,000 blocks, the miners’ reward is reduced by half for every block found. within the past, this has led to massive price increases within the aftermath. subsequent BTC Halving is scheduled for May this year (approx. 96 days). Therefore the interest in BTC and this important event is increasing day by day.

There are various forecasts on how the BTC price may behave before, during and after the halving. the simplest model thus far has been found out by PlanB and has already received several awards for it. Even Bayern LB has used the model to live the longer-term price development of BTC. The model is about how ‘hard’ a specific good is. In other words, how well worth is often stored there and the way much it’s diluted by inflation.

This can be measured relatively well by taking the number currently available and relating it to inflation at that point. this manner you’ll easily determine how long it might fancy reaching the prevailing amount with the respective inflation. This ratio is additionally used for gold and silver. Currently, BTC is already ‘harder’ than silver and after the halving, in May it’s almost as ‘hard’ as gold. In 2024, when subsequent halving takes place, Bitcoin is going to be even rarer than gold.


Bitcoin price is above the present stock-to-flow model

PlanB used this model not only to work out the ‘hardness’ of the asset but also to link a possible price development thereto. This has resulted in sometimes unimaginable price forecasts that a lot of people dream about. for instance, it had been said that the BTC price will reach USD 55,000 this year and crack USD 1 million per Bitcoin by 2025.

Whether this may happen can’t be said at the instant, but there are more factors involved than a theoretical model. Nevertheless, the model is comparatively accurate up to now and is therefore still considered conceivable. a couple of months ago we were still below the stock-to-flow model. therefore the BTC price was less than it should be consistent with the model at that point.

The model indicates a particular tendency instead of a really precise price for a particular point in time. So there also are certain fluctuations and tolerances. Therefore the low price of approx. 6,500 USD was still valid for the stock-to-flow model. However, we are currently moving above the worth of the stock-to-flow model, which is certainly an honest sign.

According to the model, the worth should be currently USD 8,958 on a 10-day average and USD 8,208 on a 365-day average. Nevertheless, the present price has relatively little to mention about whether the model will still materialize and that we can expect astronomical prices. Therefore we will only sit back and wait and see how the BTC price will develop within the coming months. Nevertheless, it’s a positive sign that the stock-to-flow expectations have come true. So it remains exciting.

Does BTC live up to the stock-to-flow model? Can we expect the Bitcoin price to exceed USD 50,000 by the top of the year?  


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