A report authored by the research team of ByteTree purports to debunk one of the most popular (BTC) valuation models — Stock-to-Flow. The model provides a very optimistic forecast for Bitcoin, claiming that a year from now we should see price levels above $100,000.
BytTree’s co-founder and chief investment officer, Charlie Morris, dedicates the entire fourth chapter of the report to “debunking” it. The stock-to-flow models have been applied for decades to forecast the price of commodities like gold and silver. Stock is the existing supply of the asset and flow is the additional new supply that is being generated. Applied to Bitcoin, it hinges on the fact that its inflation or flow will be getting progressively smaller, while the stock-to-flow ratio will be getting progressively higher. Thus, producing “sky is the limit” forecasts for the price.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.