Bitcoin Stock-to-Flow-model (S2F) describes how long Bitcoin at the current production would need to speed up to Reach the current supply. This results in a metric that is known as the Stock-to-Flow ratio.
Because Bitcoin is one of the highest Stock-to-Flow conditions for all plants, it can be as an attractive investment option. This is because it would take a long time until Bitcoin has reached its current circulating supply at the current production rate.
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Tested vs. current data
As the S2F-the ratio has modeled the Bitcoin price so far is correct, many supporters now that there is a discrepancy between the S2F-ratio predicted value of Bitcoin and its actual price can give you an insight into its future course.
Generally this is based on the assumption that Bitcoin tends to move in the direction of its predicted value. Thus, if the predicted value is higher than its current value, this could be as a bullish indicator, since Bitcoin would have to upgrade in order to achieve the model price.
The opposite is the case, if the crypto-currency is currently valued higher than the model predicts. Unfortunately, the analysis of the difference between the actual price and the predicted time-consuming, is developed, which is why other Tools for the process.
One way to rationalize this discrepancy, is the identification of the S2F-multiplier. Can be calculated by the S2F model estimated price divided by the current Bitcoin-price and then from this value of a will be deducted.
If this value is negative, Bitcoin can be considered a sub – a rating considered to be a positive multiple of indicating that he is overrated.
Bitcoin left something behind
According to the Stock-to-Flow-Multiple-Bot (@s2fmultiple) on Twitter Bitcoin with his last set of audited price of $7.343,16,and a projected price of $8.569, 50 currently has a S2F-Multiple of -0.15. As already mentioned, this is considered a bullish indicator, since Bitcoin remains currently behind the model price.
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From the looks of it, has Bitcoin since 03. January 2020, a bullish Momentum is shown. In this time the assets value from the Low of climbed to just over $6.900 to its current value of about $7.500.
There is also approximated to be S2F-Multiple in the last three days, gradually the zero line and is of -0.21 on the 03. January -0,16 yesterday to -0,15 today increased.
However, the S2F-Multiple Bot has-Twitter-since its launch in December 2019, is always a negative S2F-Multiple produces. This suggests that the S2F model has overestimated the value of Bitcoin in the last two months constantly.
Against this Background, no model is perfect and Trader should be careful not to use such forecasts as the basis for their Trading decisions.