https://twitter.com/100trillionUSD/status/1119358330739331074New #bitcoin chart: Stock-to-Flow Multiple
Like the Mayer Multiple (bitcoin price / 200w moving average), SF Multiple (bitcoin price / SF model price) indicates tops and bottoms.
- ATH 2011, 2013, 2017 is 3-13x
- bottom after ATH = 50%
- after halvings price lags SF model price
https://twitter.com/gravitywave2/status/1119310237658439681An alternative view of @100trillionUSD's stock-to-flow/price relationship showing how price oscillates around the fundamental prediction of scarcity-based market value. Big thanks to planB for doing the work on that, and to @saifedean for popularizing the SF concept.
It's happening, history will repeat itself again, beautiful graphics.
Good Morning WO,s !!!
Thanks for this post. I enjoy these discussions that look at the big picture. I find the day to day wall observing a little boring
Anyone else find it odd that the last bubble topped out at such a low price?
If the bubble tops were decreasing at a linear rate, then the last bubble would've topped out at a SF multiple of about 8x, or a price of ~$44,000, according to the SF model (see stock-to-flow chart above). Even if the bubble tops were decreasing at a logarithmic rate, I wouldn't expect it to go from 14 to 11 to 3.5.
There's a lot of debate on crypto twitter (CT), BTCtalk, etc. about the long term logarithmic growth cycle, decreasing volatility, etc. I touched on some of this in
my previous lengthy (for me) postAn alternative explanation to a very predictable logarithmic growth cycle
was offered by @filbfilb a few months ago He shows how s-curve adoption isn't quite as neat and clean as we like to think. There are fits and starts:
If bitcoin follows a similar pattern to the number of internet users, it would follow that we would see periods of higher growth interspersed with periods of lower growth. The relatively low SF multiple of the previous bitcoin bubble thus shouldn't look too out of place. Fundamental reasons for the weak bubble include network congestion, and congestion in fiat onramps (exchanges couldn't handle all the new users).
The next time bitcoin goes parabolic, in 2-3 years, these problems should be mostly solved. The old exchanges upgraded their infrastructure, and we'll have Bakkt, Fidelity, etc., more importantly. On the scaling side, we'll have more users and exchanges using segwit, we may have Schnorr signatures, more exchanges will be using batched transactions, and we may see some mainstream exchanges using LN and other second layer solutions.
In conclusion, I believe our growth may look less like this:
and more like this (credit to @filbfilb, edited by me):