The popular Stock-to-Flow (S2F) model is not applicable for valuing the first cryptocurrency. Since Bitcoin’s supply, unlike precious metals, is fixed, its price is determined by demand. These conclusions are contained in a report by ByteTree’s head of analytics, Charlie Morris.
Our new comprehensive report explores the various factors that drive the value of #Bitcoin; the first chapter examines the key macro drivers for Bitcoin in 2020. Get access to the full report here, hosted by @Bitstamp: https://t.co/fIxYG9uC7e pic.twitter.com/nMgZePb4Va
— ByteTree (@ByteTree) October 6, 2020
— cryptonews.com (@cryptonews) October 9, 2020
According to the S2F model, by 16 August 2021 the price of Bitcoin will reach $100 000.
After the third halving of Bitcoin, the price lagged behind the model’s forecast for several months.
Bitcoin’s market value dynamics and the projected price according to the S2F model. Source: Glassnode.
In June, the S2F model was criticised by Ethereum co-founder Vitalik Buterin.
ForkLog previously published a piece on crypto-asset valuation models.
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