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RE: 📈 Do you think Bitcoin Stock-to-Flow model is right?

in HODL4 years ago (edited)

I don't think the model works @resiliencia,

  • An increase in the price of BTC is primarily due to an increase in demand, not a reduction of supply (which helps but is not a fundamental driver of the increase in price imo)
  • The model predicts that the price will go to infinity which is silly

Eric Wall did a pretty good mathematical analysis on why S2F doesn't work, it's somewhere on Twitter/Medium

I think the only reason S2F became popular is because it says "Number go up"... Bitcoin twitter loved it and now it's become a meme, retail driven markets want to hear things that confirm their bullish bias... that's all.

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Thanks for your thoughtful comment @f0x-society!
I will definitely take a look at Eric Wall and try to find their analysis! I love to see different opinions!