This is what most Crypto enthusiasts, but also the masses interested, plain and simple, the Bitcoin exchange rate. So it’s no wonder that trying to determine the course and to determine whether it is a fair price or where to travel to in the future will go. A method to do exactly this, the Stock-to-Flow model, which was developed by a Quantitative analyst with the Twitter name “PlanB” is. As in the past reported, there are always Updates and new discussions to the model. Now another well-known Crypto-Analyst attacks the model and shows the weaknesses of the model, in his opinion, qualify.
Bitcoin exchange rate to Stock-to-Flow
For all the the model is still not and it once again remind you a short summary want to know here. Since the price of each Good from supply and demand, the scarcity of a Good direct influence on its price. This basic assumption of the Stock-to-Flow model, which is expressed as the ratio of the existing stock (floor), and the annual newly added inflow (Flow).The Stock-to-Flow-ratio can be determined in the case of Bitcoin due to the fixed upper limit of 21 million units and the specified Inflation from the current level of 12.5 BTC, come on average every 10 minutes, relatively well. Currently, BTC has a Stock-to-Flow value of approximately 25, silver of 22, and Gold 62. As the Halvings every 4 years the Block reward, the Miner is cut in half, doubled the Stock-to-Flow-value every 4 years.In 2020, this will rise to 50 and 2024 even in the history of mankind unprecedented value of 100. From this approach, the Analyst “PlanB derives” that the Bitcoin price will rise after the Halving in 2020 to $ 55,000 per year, which corresponds to a market capitalisation of 1 trillion US dollars. In the further course of a Bitcoin price of 1 million $ and more in the coming years and decades, comes to the model then.Trading on our brokers comparison-winning eToro. You are looking for a reliable and intuitive Broker to trade crypto-currencies, CFDs, shares, Forex, commodities and more? Then let yourself be in our eToro Test in 2019 all of the features explain, what possibilities are given to you here and where is here the Before – and disadvantages are . eToro Test 2019 read now.
Statistically a very close connection
The model is in the Bitcoin and Crypto-Community with great popularity, as it explains with astonishing precision the Bitcoin price in the past. Past price developments guarantee, of course, any future profits. However, a random connection is virtually impossible. PlanB wrote:
There is a statistically significant correlation between Stock-to-Flow-to-market value. The probability that the relationship between Stock-to-Flow-to-market value by chance is close to Zero.
Is canceled, the Bitcoin target price of 1 million US dollars?
Nevertheless, there are critics of the model. The well-known Crypto-Analyst with the name “Alex Kruger” did yesterday, his opinion about the Best. As mentioned above, the price of a Good is made up of supply and demand. Krueger criticized, therefore, the Stock-to-Flow model that consider only the supply side but the demand side largely ignore.This is the analyst a thorn in the eye, and he writes on Twitter:
Bitcoin is a story on the demand side. The offer is completely deterministic. There are no shocks on the supply side. A fixed total supply, and a decreasing supply growth are critical as these drive the demand. As simple as that. The demand is the most Important.
Amazing how so many bring up S2F these days, whenever anyone mentions bitcoin supply. I did not have S2F in mind when I wrote this tweet, and no, I don’t think it is very important, it is massively over-hyped.— Alex Krüger (@Krug macro) November 6, 2019
On the reactions of some other Twitter user Alex Krüger writes:
Amazing how so many S2F (Stock-to-Flow) in these days to attach, if someone mentions the Bitcoin Supply. I didn’t S2F in mind when I wrote this Tweet, and no, I think that it is very important, it is massive überhyped.
With his statements, the Analyst takes a counter-stance to many Bitcoin Fans, which determine the model due to its statistical accuracy as one of the best watch, the Bitcoin exchange rate. As long as the Crypto market is still in its infancy, and the BTC in the international financial world, has not yet been set, will not abate the discussions.
We of crypto Monday think, however, that Numbers don’t lie and the Stock-to-Flow model, in spite of all the criticism with a high probability meaningful. Of course, as long as fundamentals of Bitcoin, nothing will change.Alex Kruger says it very correctly. The Bitcoin exchange rate is supply and demand, the offer is written in the Code of Bitcoin is fixed and developed accordingly. The demand must, however, be at least equal to the BTC price rise. The demand should increase even are certainly also increase in value as possible in the past. However, there are many “If” and “But”. Therefore, we also emphasize that in addition to the Stock-to-Flow value, many other factors play a role and need to be considered.We can be curious whether the Bitcoin price will be based more strongly on the predictions by the model and what will happen after the Halving in may 2020.
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