Hey everyone.
I was doing some digging and stumbled upon this Stock to Flow model that’s pretty handy for figuring out the long-term value of something like Bitcoin. Thought it’d be cool to share it here so other newbies can get the scoop too.
The Stock to Flow model is a well-known way to predict Bitcoin's price over time. Originally, this model was used for assets like gold and silver. It basically says that the value of a limited resource is based on its current supply (the stock) compared to how much new supply comes in each year (the flow).
Here’s how the math works:
Stock to Flow ratio = Total existing supply (stock) / annual new supply (flow).
When the ratio is high, it means the asset is rare.
When it’s low, there’s a lot of it around.
The main idea is that as something gets scarcer, its value goes up.
Bitcoin fits this model really well since its supply is easy to track and super clear. Plus, there’s the Halving event where the number of new Bitcoins created every four years gets cut in half. This process boosts the Stock to Flow ratio, signaling that Bitcoin is becoming more scarce, which should push its value up.
The Stock to Flow model is similar to other models that are all failed in predictions. No models can predict price accurately and do it correctly forever and Stock to Flow model is not a perfect model certainly.
Your topic is not a first one about Stock to Flow model and there is an old thread about it with more details as well as insightful discussion ideas too.
Stock-to-Flow Model: Modeling Bitcoin's Value with Scarcity.
This is a nice discovery you have made because it will make many of us to be able to predict on what to expect form our bitcoin investment in the future, just that i don't know how accurate could this precision be, also, for those that may want to remain as they have always been, investing in bitcoin and holding over time is as well more profitable, but the measure to determine how profitable this has truly gone over the time may be seen from what OP is suggesting through this thread.
The model seems nice in hindsight but you need to realize that they make adjustments to how its calculated as there is more time.
Its just meant as an estimate. I think I tried following it once and missed selling the top because I trusted it. Later the author adjusted the algorithm when it peaked.
So just keep in mind, the indicator pretty much repaints. There is no indicator which will predict every top or bottom. Its all just a technical indicator and nothing else.
It has lost it's luster already when it failed to predict the last bull run in 2021. So it was heavily criticized that we haven't heard it for a long time until you bring this up. But then again, as others have said, he just keep on adjusting his model so that it can fit his narrative. And with that, he was just exposed as this model is just like any other prediction that we have heard. Anyone can make his own prediction, bring up his own model with mumbo jumbo terms and make it well known. So it has died down already, and sorry to burst the bubble to the OP, but it won't gain back the traction that it has before.
Sincerely speaking I don't any model can be used to factor or determine the price of Bitcoin for long term, as I know Bitcoin price is extremely unpredictable and what I know most people are doing is just speculation and for sure there is two things certain either low or high that is what we would experience in the market. I don't think there is anything other than this two factors (-+), though I do came across where it was fully expressed.
Yes, there are no experts in here, no one has the crystal ball to predict. Even if they have this kind of prediction modelling, it will have to fail at some point because it's hard to see the price movement. Even if short time frame, some of our TA are going to be invalidated. What's more of trying to predict for the long term as there will be a lot of factors that are going to appear somewhere along the line.
And it's 2025 already, not one has been talking about this model as it has been dead for years, or at least we are no longer interested to hear what the author has to tell as if he has lost all of his credibility and reputation when his model failed in the last bull run.
It's true that bitcoin has a total of 21 million supplies but how about the speculations that the total supplies won't be mined as a cause of users loosing their bitcoin? So as a case study to think this model could determine the future price of bitcoin just because it total supplies is notable, so in that case of the valid supplied figures not going to be an exact to the total supplies, how's the model going to determine the ratio?
Maybe that's where the model went contrary after it could give adequate results in the past years and currently misbehaving according to how the developer tend to project it to flbe able to give adequate results.
See, left with me, I won't fall a trap to be convinced by any technology that claims to predict the future value of bitcoin. Perhaps if there is even a tool to paraventurely determine the future values of bitcoin, that won't be different from every other strategies or technology that stresses on predicting the future price of bitcoin because non of the techniques or analysts could be guaranteed or regularly make it successful to determine the future outcome for a long term.
So, take that stock to flow model as a failed mechanism. If it works for you too then I expect you should be a mutil millionaire in bitcoin trading by now.