Stock to flow ratio

[Bossian]

Hi folks,

Interestingly there was a massive spike of this ratio very recently.

CCU Youtube channel talked about it last week (sorry for the advertising on the video but his work should be respected so I left it):

https://i.ibb.co/2PFDmrn/2019-12-31-1155.png


Interestingly the same massive spike happened twice before and each time just before halving.

One thing I wonder, why this time the spike is 6 months earlier?

And any opinion about the necessary or unnecessary correlation with Bitcoin price?

Without being an expert, I wouldn't be surprised to see another big run but it also wouldn't surprise me to see a very delayed run really starting from 2022 or later than that.

Thanks for your constructive opinions!!  

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[odolvlobo]

Without a link to the video, it is difficult to comment, but the graph seems to have an error. The first two increases are the result of the halvings when the flow was instantly halved. The third increase should not be there. The halving has not occurred yet.

As for the correlation between the halvings and the price -- the graph shows that it does not exist. The increase shortly after the first halving seems to imply a relationship, but the other two increases and the second halving show no correlation. Note also that the first major increase that happened in 2011 is not shown and it is not correlated with a halving. Also, there are several less-spectacular (though still significant) increases, none of which can be correlated with a halving.

As for the correlation between price and stock-to-flow -- it is a coincidence. Any two graphs with exponential increases can appear to be correlated. Bitcoin's stock-to-flow graph is exponential, and coincidentally, Bitcoin's price has also risen exponentially, so their graphs can be made to appear to match. Other graphs that appear to be correlated with Bitcoin's stock-to-flow are the rise in CPU processing power and sales of cell phones.