Stock-to-Flow Model: Modeling Bitcoin's Value with Scarcity

[Poker Player]

So your sources are probably different from his.

Hey, no. As I was thinking, that article is from back in April. Since then Silver Market Cap has more than doubled.

https://companiesmarketcap.com/silver/marketcap/

"Silver's Market Cap

Estimated Market Cap: $1.496 T

The Market Capitalization of Silver is currently arround $1.496 T.

This value was obtained by multiplying the current silver price ($27.37 per once) with the amount of silver that is estimated to have been mined so far."

A good website to follow Bitcoin market cap vs other assets is:

https://companiesmarketcap.com/assets-by-market-cap/



As you can see we aren't there yet but I don't think it will take too long with the current trend.

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[fillippone]

Very good point.
In addition, the source of the website you suggested, is the same PlanB used in his article, so market cap is directly transferable into his model.

On the big picture anyway anything changes, but I reckon all the dots should move also.

I will try to tweet him. Let’s see what happens.

[acquafredda]

Today Bitcoin surpassed, for the first time in history, a market capitalisation of 1 Trillion of dollars:

This is not a finish line, but a good start for the next target: Gold Parity.

Straight line up to $1trillion market cap! #bitcoinBTC

going for gold next ($10T)

https://twitter.com/100trillionUSD/status/1361965084831064064

This graph is from the Xasset Model, where PlanB shows different asset classes, with different S2F lays on the same straight line.
Bitcoin, whose S2F is slowly moving to higher and higher levels, is moving across the line.

That is great news with only one caveat dear filli! Gold parity not referring to price please!!! In terms of capitalization we will get there in around 10 years at this pace.
If the institutionals are followed by smart retailers we can get there very easily, not mentioning that many gold bugs could convert to crypto some % of their holdings.
It is doable.

[fillippone]

That is great news with only one caveat dear filli! Gold parity not referring to price please!!!

When I say gold parity I am thinking about t market capitalisation. As we now are at 1Trln while gold is at 11 Trln, then I am saying that in order to achieve this price must improve tenfold (neglecting the effect of newly mined coins).
So, in this sense also price is involved.
Hope it clarifies, @acquafredda.

[acquafredda]

That is great news with only one caveat dear filli! Gold parity not referring to price please!!!

When I say gold parity I am thinking about t market capitalisation. As we now are at 1Trln while gold is at 11 Trln, then I am saying that in order to achieve this price must improve tenfold (neglecting the effect of newly mined coins).
So, in this sense also price is involved.
Hope it clarifies, @acquafredda.

Yeah, I know what you were referring to, sometimes I like to make stupid jokes 
By the way, I found the pinned message of Digitalik.net https://twitter.com/digitalikNet/status/1210251305568161794 and I fail to get why it says it predicted 90k in 2020.
Was the model changed at some point? It looks different now, have I missed something.
I know these are only predictions but I want to understand the logic behind (see image below)

[fillippone]

I know these are only predictions but I want to understand the logic behind (see image below)

I think they are referring to the 10 days lag model.
Of course, imagining the price adjusting for the new S2F in 10 days only, I think is a little bit optimistic. So better to consider the slower 463 days (updated from the 365 days on the graph).

Anyway, yes, bear in mind that picking too old messages can get you on different versions of this model.

[acquafredda]

I feel kind of tricked now I supposed the model was consistent all along... or maybe I failed to get its logic in the first place (which is also absolutely possible).
Thanks for the clarification as I could not understand how to relate those two graphs into the same context.

[fillippone]

PlanB is taking pride in his model working flawlessy month after month.




https://twitter.com/100trillionUSD/status/1367065337246715904?s=20

The blue dots were known at the time of publishing his first article
The red dots came after it.
The model is confirmed working.
No big surprises here as the model has been working since 2011, well before the first halving.

[wack slacker]

Bitcoin's Stock-to-FLow model is awesome and it's being used very well by Sushi. There is less Sushi in exchanges over time because they have stakes in liquidity pools. Bitcoin's deflationary model has brought success to Bitcoin as its value continues to increase over time.

[acquafredda]

PlanB is taking pride in his model working flawlessy month after month.

The blue dots were known at the time of publishing his first article
The red dots came after it.
The model is confirmed working.
No big surprises here as the model has been working since 2011, well before the first halving.

He can that all that he wants for what it is worth. If PlanB continues to work and follow the model as intended who are we not to pay tribute to the 100trillionUSD man?
My only concern, I have expressed earlier on, still haunts me a bit but I guess I am overthinking it too much.
Keep calm and carry on.

[fillippone]

Bitcoin's Stock-to-FLow model is awesome and it's being used very well by Sushi. There is less Sushi in exchanges over time because they have stakes in liquidity pools. Bitcoin's deflationary model has brought success to Bitcoin as its value continues to increase over time.

Nah, as I stated in OP this model do not apply to shit coins (or shit tokens).
Sushi being taken off the exchanges has nothing to do with scarcity. It might be about demand and supply, but this doesn't mean sushi is scarce at all.  So I can't even understand why it is relevant here.

[wack slacker]

Bitcoin's Stock-to-FLow model is awesome and it's being used very well by Sushi. There is less Sushi in exchanges over time because they have stakes in liquidity pools. Bitcoin's deflationary model has brought success to Bitcoin as its value continues to increase over time.

Nah, as I stated in OP this model do not apply to shit coins (or shit tokens).
Sushi being taken off the exchanges has nothing to do with scarcity. It might be about demand and supply, but this doesn't mean sushi is scarce at all.  So I can't even understand why it is relevant here.

I think that mining happens because of demand and whether or not any altcoin with a deflation pattern will increase in value.
Sushi is a token but it is mined through being taken out of exchanges and locked to continue making Sushi. Sushi mining becomes more difficult because its algorithm reduces the amount of Sushi tokens generated over time.

The value of Bitcoin, gold or silver increases as they are stored and taken out of exchanges.  So I don't think it makes any difference in terms of how scarcity is created.

[fillippone]

Bitcoin's Stock-to-FLow model is awesome and it's being used very well by Sushi. There is less Sushi in exchanges over time because they have stakes in liquidity pools. Bitcoin's deflationary model has brought success to Bitcoin as its value continues to increase over time.

Nah, as I stated in OP this model do not apply to shit coins (or shit tokens).
Sushi being taken off the exchanges has nothing to do with scarcity. It might be about demand and supply, but this doesn't mean sushi is scarce at all.  So I can't even understand why it is relevant here.

I think that mining happens because of demand and whether or not any altcoin with a deflation pattern will increase in value.
Sushi is a token but it is mined through being taken out of exchanges and locked to continue making Sushi. Sushi mining becomes more difficult because its algorithm reduces the amount of Sushi tokens generated over time.

The value of Bitcoin, gold or silver increases as they are stored and taken out of exchanges.  So I don't think it makes any difference in terms of how scarcity is created.

Indeed there is difference.
Diamonds are not scarce, their scarcity is artificial, as the only provider is hoarding all of them in their caveaux.
This is artificial scarcity, as supply is constrained artificially.
This could well be reversed at once, if De Beers change their mind.
Bitcoin scarcity is coded in the algorithm, and secured by network nodes.

[JayJuanGee]

Bitcoin's Stock-to-FLow model is awesome and it's being used very well by Sushi. There is less Sushi in exchanges over time because they have stakes in liquidity pools. Bitcoin's deflationary model has brought success to Bitcoin as its value continues to increase over time.

Nah, as I stated in OP this model do not apply to shit coins (or shit tokens).
Sushi being taken off the exchanges has nothing to do with scarcity. It might be about demand and supply, but this doesn't mean sushi is scarce at all.  So I can't even understand why it is relevant here.

It is important to note, from time to time, that a variety of shitcoins, whether we are referring to sushi or some of piece of crap scam project, may well engage in a variety of tactics to attempt to imitate bitcoin and some of its features, and part of their appeal for some folks is that they are not able to determine the various differences between shitcoin 1, shitcoin 2, shitcoin 3 and bitcoin, so really those various shitcoins deserve to be analyzed in some other thread, and sure they might try to apply stock to flow modelling and a variety of factors, and perhaps in the end there might be some shitcoins that might stand up to scrutiny, including live tests with the passage of time (though I doubt it), and in the end, likely ONLY one or two differences or even testing out how the various shitcoins play out with a bit of load upon them in the real world will end up showing that they are lacking, whether it is scaling, or lack of transparency, or lacking in various kinds of network effects such as distributed mining or distributed development or liquidation avenues.. ...so fuck the premature (misleading) attempts at trying to draw parallels between various shitcoins and bitcoin in these kinds of threads, and take those analysis attempts, to the extent that they are genuine at all, and play them out for a year or two (minimum) and then maybe at some point, there could (perhaps?  I doubt it) be some abilities to hold them up to some of the bitcoin features, characteristics, built -n incentives and/or price dynamics.

[Karartma1]

Bitcoin’s stock-to-flow ratio increased drastically in May 2020 - after the last halving. By contrast, gold’s stock-to-flow ratio was only insignificantly higher last May. If the May 2020 stock-to-flow ratio for Bitcoin was factored correctly into the model, a vertiginous price of $90K is yet to be explored.
Hold on.

[fillippone]

A good model is one that is capable to forecast the future.
Well, according to this tweet of PlanB, S2F is one of those models, as the "out of sample" points, or the points NOT used to calibrate the model, are well forecasted by the "in sample" points


https://twitter.com/100trillionUSD/status/1380456734725173248?s=20

The blue dots are the monthly data used to calibrate the model. The red ones are the ones realised after the original model has been published.
They follow the model white line like a clockwork!

[Rikafip]

The blue dots are the monthly data used to calibrate the model. The red ones are the ones realised after the original model has been published.
They follow the model white line like a clockwork!

First time I read your topic about PlanB and stock-to-flow, I really though it's way too optimistic (I am usually a bit cautious about BTC predictions, some would say even too much) but looking it at the current situation where market  follows it, gets me really excited. Even I started thinking that $1 million by 2025 is possible.

Anyway, just saw a PlanB tweet where he is even relieved by this last correction. Looks like BTC pumping the eay it did so far was too much even for him


https://twitter.com/100trillionUSD/status/1385496730200907776

[JayJuanGee]

The blue dots are the monthly data used to calibrate the model. The red ones are the ones realised after the original model has been published.
They follow the model white line like a clockwork!

First time I read your topic about PlanB and stock-to-flow, I really though it's way too optimistic (I am usually a bit cautious about BTC predictions, some would say even too much) but looking it at the current situation where market  follows it, gets me really excited. Even I started thinking that $1 million by 2025 is possible.

Anyway, just saw a PlanB tweet where he is even relieved by this last correction. Looks like BTC pumping the eay it did so far was too much even for him


https://twitter.com/100trillionUSD/status/1385496730200907776

Frequently, I have stated that the considerations of the stock to flow model need to try to retain a decent amount of flexibility in terms of how much BTC's actual price performance needs to be allowed to deviate from the predictions and still be allowed to have predictive value because the model surely seems to be striving to achieve predictions based on data (data-driven)..

So, sometimes it seems that even PlanB communicates in ways that are too locked in and seems to get caught up on what the model had previously stated rather than whether there might be deviations from the model that would justify tweaking it and continuing to allow it to be data driven and merely a guide rather than some kind of sorcery.. which I get a bit hostile when anyone is trying to be a sorcerer or to suggest that some model that they have retains some level of sorcery status.. even though we certainly can recognize that some models are much better than others, and the stock to flow model does seem to be amongst the best (currently and based on current data that we have).

[LUCKMCFLY]

One of the things that I like the most about the S2F model is that it has the answers to everything, for now the market is going through a correction, some think that it can reach almost 35% of the correction, so far it is 25%, But one of the last publications that I have read, for this 2021 there is still more to go in a bullish sense:

This Was Not the Top of Bitcoin’s 2021 Bull Run, According to PlanB

As PlanB’s graph above indicates, the cryptocurrency had experienced similar steep price corrections during its previous two major bull cycles – in 2013 (after the first halving) and 2017 (after the second). In fact, both transpired approximately at the same time during the run as the current one, which he classified as “the mid-way dip.”

Source: https://cryptopotato.com/this-was-not-the-top-of-bitcoins-2021-bull-run-according-to-planb/

The best thing about all this is that it is very possible to see the price of Bitcoin at $ 288k, everything points to it.

[Stedsm]

I don't believe in his S2F model TBVH but yeah, I can say that it's quite impressive here to see so many charts about the same and like LUCKMCFLY said, S2F has answers to almost everything but not the worst possibilities that may take place once the need of humans arise after a steep rise in inflation that's definitely going to take place considering the current amount of deaths taking place and evolving Coronavirus and its increasing number globally. This is such naturally (dead yet) powerful thing that can't be ignored and for the same, people will definitely want money to survive and for that, they'll try to FOMO sell after seeing a 27% dump in a day. I'm not bearish on BTC, but everyone here forgot a fact that BTC has gone dead a lot of times and it can again die till an area nobody would have thought of, before rising up again as a new Dawn. At that time, this S2F model will become valid again but I believe that things are going to change this time.