Technical (RSI) & on-chain (realized) indicators show that #bitcoin went full cycle. We had a bull market (top Mar/Apr 2021) and a bear market. In fact we are still in a bear market. Question is: is the bottom behind us (similar to realized in 2012) or yet to come (e.g. RSI<50)? pic.twitter.com/swzcif5Uwg — PlanB (@100trillionUSD) May 2, 2022
PlanB rose to fame in bitcoin circles for his model that predicted the future bitcoin price using a Stock to Flow (S2F) model.
#bitcoin April close: $37,639 pic.twitter.com/cswhtYZ2X7 — PlanB (@100trillionUSD) May 1, 2022
Stock to Flow takes the current supply of an asset, the mined bitcoins, and the future expected rate of issuance to give a ratio. Thinking in bitcoin terms, roughly 19M have already been mining with an average annual flow of 328,000 bitcoin issued per year. Keep in mind that increased adoption and growing scarcity will drive value. This gives bitcoin a stock to flow of 57, roughly. For comparison, Gold’s S2F is ~60 with a market capitalization of 10T. Bitcoin’s market capitalization is just below 1T with a S2F roughly equal to gold. This model suggests bitcoin is severely undervalued by the market.
Silver: stock-to-flow ~30 and market cap ~$1trillion. Gold: S2F ~60 and market cap ~$10T. Real Estate: S2F ~100 and market cap ~$100T. Do you think it is pure coincidence that market cap increases with stock-to-flow (scarcity), or is this a significant pattern? — PlanB (@100trillionUSD) March 21, 2021
Time to panic or buy the dip?
once the next having occurs (2024), bitcoin will have a S2F of 121. The current price action seems like a bargain.