Bitcoin Stock-to-Flow Model Back on Track, Predicts $500K Per BTC: PlanB

The Bitcoin stock-to-flow model, developed by PlanB, is back on track and predicts a staggering price of $500,000 per BTC. Following a remarkable surge of over 15% in just one week, Bitcoin has not only broken its previous all-time high from March but has also reached new heights, nearing $80,000.

Price Predictions and Historical Context

Despite various predictions from less credible sources, the stock-to-flow model remains one of the most respected frameworks in the cryptocurrency space. PlanB asserts that Bitcoin is now "ready to take off," with the model suggesting an average price of $500,000, with a range between $250,000 and $1 million. This updated model incorporates five years of new data while maintaining the original parameters.

"After the ETF fake-out earlier this year, Bitcoin is now ready to take off. The stock-to-flow model predicts a 500k average with a 250k-1m bandwidth."

The stock-to-flow model compares Bitcoin to scarce commodities like gold and silver, where "stock" refers to the existing supply and "flow" to the annual production, which is halved every four years. Historically, the model has made several bullish predictions, although not all have materialized, such as the forecasts of $100,000 and $135,000 by the end of 2021.

Market Response to Political Developments

The recent rally in Bitcoin's price follows Donald Trump's victory in the 2024 U.S. presidential elections, which has led to renewed interest and significant buying activity among crypto investors. This is evidenced by a surge in ETF inflows and stablecoin transfers to exchanges.

The influx of funds into trading platforms indicates that investors are either purchasing or preparing to buy, potentially driving prices even higher.