The controversial analyst who burst onto the scene last year after being the first to apply the stock-to-flow (S2F) ratio to Bitcoin (BTC) has tweaked his model to come up with a new forecast for the leading cryptocurrency.
In a new blog post, PlanB says the latest model takes into account the evolving narratives of Bitcoin over the last 10 years. He says that the cryptocurrency’s transition from one use case to another comes with certain “financial milestones.”
To illustrate his point, PlanB tracks Bitcoin’s changing narratives, from its early days as a proof of concept to its potential use as a means of payment and its emerging reputation as a digital form of gold and a financial instrument.
To predict the next phase of Bitcoin’s narrative, PlanB identifies the BTC phases as clusters, removes time from the equation and integrates silver and gold into the model.
“With the phase transition perspective of BTC clusters as different assets, I can now add other assets like silver and gold to the model. This makes it a real cross asset model. I call this new model the BTC S2F cross asset (S2FX) model. S2FX model enables valuation of different assets like silver, gold and BTC with one formula.”
With the new model complete, PlanB says Bitcoin’s predicted value by the end of 2024 is $288,000.
“S2FX model estimates a market value of the next BTC phase/cluster (BTC S2F will be 56 in 2020–2024) of $5.5T. This translates into a BTC price (given 19M BTC in 2020–2024) of $288K.
Solidifying known facts from the original S2F study, the S2FX model offers a new way of thinking about BTC transitioning into the fifth phase.”
Crypto analysts and influencers are divided on whether it makes sense to apply the stock-to-flow model, which is usually applied to precious metals, to a digital asset like Bitcoin. As for PlanB, the pseudonymous analyst has worked to steadily improve his S2F model, which divides the circulating supply of a commodity by its yearly production in order to track scarcity and forecast future value.
The new prediction that BTC could hit $288,000 is his third. PlanB’s original S2F model indicated Bitcoin would trade around $55,000 between 2020 to 2024. The second incarnation of the model showed the dominant cryptocurrency on track to hit $100,000 in the same time frame.