Analyst Plan B: Weak Dollar Can Upend Bitcoin Stock-to-Flow Model

Published on by Cointele | Published on

The creator of the highly popular Stock-to-Flow model for forecasting the Bitcoin price says he would be happy if it stays valid for the next 12 years.

Stock-to-Flow measures Bitcoin price using the existing available supply - the stock - and the number of new Bitcoin units entering circulation - the flow.

Bitcoin's flow halves roughly every four years in what is called a block reward halving.

Each event decreases the amount of Bitcoin paid to miners for finding a new block.

As an asset with a high stock-to-flow ratio, Bitcoin ranks with gold as the antithesis to fiat currency, which can have its flow dramatically increased relative to its stock.

This quality has led many to describe Bitcoin as "Digital gold."

PlanB agreed, the model may one day no longer be able to take into account the weakness of the dollar if its stock-to-flow ratio drops even more.

Specifically, this concerns the status quo at the end of Bitcoin's mining period in 2140.

He agreed with the idea that it is not Bitcoin's value increasing, but rather that "Everything else's value is decreasing."

As Cointelegraph reported, Stock-to-Flow calls for Bitcoin to retain an average price of around $8,200 before its next halving event in May 2020.