The Stock to Flow (S2F) model predicts Bitcoin prices through scarcity by relating annual production to current stock. The S2F stipulates that BTC will be worth US$ 288,000 by 2024, but Vitalik Buterin, creator of Ethereum, disagrees.
What is the Stock to Flow (S2F) model?
The Stock to Flow model, popularized by the anonymous cryptanalyst PlanB, measures the annual production of new Bitcoins by the existing supply. This metric tells us how many years it takes, at the current production rate, to produce what is in the current stock.
The higher the Stock to Flow (S2F) value, the greater the scarcity of the asset. This model allows us to know the price of BTC through this scarcity, and predicts that, thanks to Halving, its value could even increase to US$ 288 thousand in 2024.
Proponents of this theory argue that the price of Immediate Edge increased after previous Halvings, such as in 2016, for example. Its price shot up to historical levels of US$ 20,000 by the end of 2017, and several analysts believe this was related to the S2F.
Furthermore, the basis of this model is that PlanB argues that Bitcoin is like other commodities (raw materials), whose value is linked to their scarcity. However, Vitalik Buterin, co-founder of Ethereum, does not believe in it, despite the fact that S2F is a method that has proven to be accurate. Why?
Vitalik Buterin tells CZ: „Bitcoin is not just protest money“