Bitcoin Price Matches Stock-To-Flow Forecast As $100K Halving Nears

Authored by William Suberg via CoinTelegraph.com,

Bitcoin now almost perfectly aligns with the historically accurate price chart, which has charted its growth from pennies to digital gold.

image courtesy of CoinTelegraph

According to data from Digitalik, a resource that monitors Bitcoin’s position relative to the Stock-to-Flow model, as of Jan. 20, BTC/USD is exactly where it should be. 

$8.6K Bitcoin sticks rigidly to forecasts

Stock-to-Flow measures the Bitcoin price using two factors: the stock — the number of Bitcoins in circulation — and the flow, which is the number of new Bitcoins entering circulation. 

Bitcoin’s low emission rate relative to its existing supply – like gold – means Stock-to-Flow constitutes useful evidence in the argument that Bitcoin is “digital gold.”

The cryptocurrency’s run-up to $9,000 last week took it slightly over where Stock-to-Flow pricing forecasts suggested it might trade. 

Bitcoin price versus Stock-to-Flow. Source: Digitalik/ PlanB

At press time, however, BTC/USD traded at $8,680 — just $150 above the forecasts.

BTC on track for $100,000 in 2021

As Cointelegraph previously reported, Stock-to-Flow’s creator, the analyst known as PlanB, originally suggested that Bitcoin would hover at an average of in the year before its block reward halving in May 2020.

At that point, a 50% reduction in the number of new Bitcoins released to miners each block would further limit the flow versus the existing stock. Thereafter, he has said, price performance should accelerate dramatically — by 2022, a single Bitcoin should be worth around $100,000.

In 2019, BTC/USD only temporarily diverged from Stock-to-Flow as it hit $13,800, only to fall below expectations for a similarly brief period in December.