PlanB, the creator of the well-known Stock-to-Flow (S2F) Bitcoin model, took it to Twitter to provide an update on how the cryptocurrency is performing following the latest developments in the market.
BTC continues to follow the S2F cross-asset (S2FX) model “like clockwork,” despite the most recent correction and is still on track to reach $288,000 by 2024.
First things first, the stock-to-flow cross-asset model takes new approach compared to the stock-to-flow model. It introduces phase transitions.
“During phase transitions, things get totally different properties.”
An example is given with the US dollar, which transitioned from a gold coin to paper backed by gold to a paper backed by nothing.
The model uses four clusters which indicate the phase transitions for Bitcoin – from proof of concept to payments to e-gold, to a financial asset and cross-compares it to gold and silver.
PlanB uses regression analysis to come to the conclusion that the “S2FX model shows a significant relationship between S2F and market value of these six assets… with a perfect fit.”
As CryptoPotato reported on numerous occasions in the past week, the price for Bitcoin took a beating as it dropped from its all-time high above $58,000 down to where it’s currently trading at around $47,000.
However, PlanB revealed that the February closing price of $45,240 added a new orange dot to the S2FX model, keeping it entirely intact.
This certainly gives more fuel to the long-term narrative that Bitcoin’s price will continue accelerating because of a supply shortage. Indeed, in December, the CTO of data analytics company Glassnode outlined that the maximum supply of 21 million bitcoins, while also taking into account the fact that many coins have been irretrievably lost, puts the asset in an ‘extremely bullish’ liquidity crisis that should prop the price up as demand grows higher.
