Bitcoin Overvalued According Stock-To-Flow Model Comparison With Past Cycle
Bitcoin has recently come into favor and fame, primarily due to the cryptocurrency’s hard capped,21 million BTC supply with even less in circulation, and millions more suspected to be lost or locked away forever, it is potentially the hardest form of money ever known.
Comparisons with gold – another asset with a limited supply – has benefited the cryptocurrency, which has been pitched as the digital version of the precious metal.
Certain models have been created to attempt to affix a valuation to gold based on its scarcity, and such a model was in the past adapted to Bitcoin by a pseudonymous analyst named planB.
The stock-to-flow model has been widely cited from CNBC anchors to other crypto analysts and is among the most sworn by standards in the cryptocurrency community. The model projects each BTC to eventually be worth $100,000 to $1 million and more per coin, and price action has historically traced along perfectly.