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This Will Be Bitcoin’s Price During the Next Halving, According to PlanB’s S2F Model

AA News - Jordan Lyanchev 2023-04-22 19:00

Despite its previous success, the stock-to-flow model attracted numerous opponents in the past year, given its failure to predict bitcoin’s price in 2022.

Its creator, though, remains a believer and outlined the possible scenarios in play for BTC for the next halving, which is supposed to take place in a year.

S2F Places BTC at $60K

A lot has been said about the S2F model in the past several years, with most bitcoin maxis supporting it, given its bullish price predictions, while many others have criticized it in times of inaccuracy. It takes under consideration the stock as the size of existing reserves (or stockpiles) and the flow – the annual supply of bitcoins on the market.

The model had a good run for the first few years after PlanB laid it out, hitting several of its targets. However, it failed to come even close to reaching its most recent predictions, including surpassing the six-digit price tag by the end of last year, despite PlanB’s assertions.

The halving, the event that slashes BTC’s production by half approximately every four years (210,000 blocks), is an essential part of the model since it reduces the flow (annual supply). With the next one supposed to take place in roughly a year, according to current estimations, PlanB outlined where bitcoin will be in terms of USD price at that point.

He asserted that the asset will trade at around $60,000 (or more than 2x from its current price), and will keep going up after the fourth halving takes place.

Saying S2F model is “wrong/invalid/broken”, means saying BTC price pumps after 2012, 2016, 2020 halvings (red arrows) are coincidences, random, unrelated to halvings.
Possible, but I disagree. IMO 21M cap, supply schedule, 4y halving cycle are fundamental to BTC price. IMO the…

— PlanB (@100trillionUSD) April 21, 2023

Bitcoin and Metcalfe’s Law

PlanB also touched upon Metcalfe’s Law, which argues that the financial value or impact of a (telecoms) network is proportional to the number of connected and operating users, to substantiate its BTC price prediction. Although Metcalfe’s Law typically refers to a certain type of network, the Bitcoin blockchain also works as one, and it has been increasing in terms of active users and BTC holders.

Metcalfe’s Law says: value of a network = number of users squared (N^2)

S2F Model says: value of an asset = scarcity cubed (S2F^3)

So if S2F 2x then value 8x (2x2x2)
Oh, and April 2024 halving will 2x #Bitcoin S2F
Probably nothing🔥

— PlanB (@100trillionUSD) April 21, 2023

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