According to Plan B’s now famous stock-to-flow model, the price of Bitcoin can be expected to reach prices of $100,000 to $1 million per <span class="wpg-tooltip-term-title">Coin</span></h3><div class="wpg-tooltip-content">A coin is a unit of digital value. When describing cryptocurrencies, they are built using the bitcoin technology and have no other value unlike tokens which have the potential of software being built with them.<p class="wpg-read-more"><a href="https://www.newsbtc.com/dictionary/coin/">» Read more</a><p></div>”>coin eventually. The theory is based on the cryptocurrency’s scarce supply.
However, looking at the Bitcoin daily stock-to-flow chart, the crypto asset is currently overvalued compared to past cycles. Here’s what this could mean – both bullish and bearish – for the leading cryptocurrency by market cap based on this hypothetical comparison.
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 the precious metal.
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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 Plan B.
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 <span class="wpg-tooltip-term-title">Coin</span></h3><div class="wpg-tooltip-content">A coin is a unit of digital value. When describing cryptocurrencies, they are built using the bitcoin technology and have no other value unlike tokens which have the potential of software being built with them.<p class="wpg-read-more"><a href="https://www.newsbtc.com/dictionary/coin/">» Read more</a><p></div>”>coin, and price action has historically traced along perfectly.
Bitcoin is above the median of the stock-to-flow model, compared to the last bull market | Source: Plan B on Twitter
