The S2F Model: An Introduction
PlanB, the pseudonymous analyst, has garnered attention with his Stock-to-Flow (S2F) model that ambitiously predicts Bitcoin will skyrocket in value. His latest forecast on November 8 is that Bitcoin could reach between $100,000 and $288,000 by December 2021. But wait, what is this S2F model anyway?
Understanding the Basics of S2F
The S2F model centers around two main concepts: the fixed supply of Bitcoin and the halving events that occur roughly every four years. Every time Bitcoin’s block reward halves, the rate at which new coins are mined is significantly reduced.
- Fixed Supply: Bitcoin has a capped supply of 21 million coins.
- Halving Events: The most recent halving in May 2020 slashed daily Bitcoin production from 1,800 to 900 coins.
This unique combination suggests that as supply diminishes, the price should theoretically rally upward. Like a good ol’ game of hide and seek—except instead of kids, it’s coins and their value!
What Happens if Bitcoin Hits $100K?
Should Bitcoin manage to break that elusive $100,000 barrier, it would not only flaunt its high price tag but also boast a market capitalization near $2 trillion, making its peers (hello, Apple!) a little nervous about their own valuations.
Imagine Apple and Bitcoin sitting around a coffee table, discussing their market capitalizations—awkward, right?
The Model Forecasts: An In-Depth Look
According to the S2F model, estimates suggest Bitcoin could reach a staggering market value of $5.5 trillion. In a tweet, PlanB reaffirmed that his projections hold water, with a forthcoming price estimate between $100K and $288K based on insights from supply shortage data.
“People ask if I still believe in my model. To be clear: I have no doubt whatsoever that #bitcoin S2FX is correct and #bitcoin will tap $100K-288K before Dec2021.” – PlanB
The Supply Dilemma: Less is More
Interestingly enough, Bitcoin’s actual supply might be lower than the 21 million coins figure we’ve all been fed. According to Willy Woo, who crunches numbers on on-chain analysis, many coins are lost or rendered obsolete—meaning that only about 17 million BTC are in circulation. Talk about a twist!
In practicality, this could imply that there’s only 0.002 BTC available per person on Earth. Imagine the scarcity!
What Lies Ahead for Bitcoin?
The spotlight for Bitcoin continues to shine brightly, especially with its halving events shaping market dynamics. Whether PlanB’s model hits the jackpot by December 2021 remains a point of eager speculation.
With Bitcoin edging from approximately $8,700 to nearly $15,500 post-halving—a 78.1% boost—who’s to say we won’t see those flashy price tags sooner rather than later?
