With much of the hype surrounding Bitcoin’s recent halving now fading Forbes have highlighted that an anonymous yet widely followed strategist who claims to be a member of an investment team that manages around $100 billion in assets has released an update to his stock-to-flow model which indicates Bitcoin (BTC) could jump in price to the $100,00 mark.
What is stock to flow?
‘Stock-to-flow’ is a number that shows how many years, at the current production rate, are required to achieve the current stock. The higher the number, the higher the price. So the Stock to flow is defined as a relationship between production and current stock that is out there.
So why the change now?
During 2019 there was an article that used the stock-to-flow model on Bitcoin but it didn’t account for the estimated 1 million bitcoins that Satoshi Nakamoto (Bitcoin creator) mined that are either lost or just not moving. That combined with the latest halving has called for an updated version of the model.
You can read a full article on the subject by PlanB over on medium https://medium.com/@100trillionUSD/bitcoin-stock-to-flow-cross-asset-model-50d260feed12 and also find a live chart using the formula here: https://digitalik.net/btc/
