PlanB, the brainchild behind the Bitcoin stock-to-flow model, has revealed he is feeling “uneasy” about his renowned price predictions due to the recent downtrend in markets.
The stock-to-flow (S2F) model, which has predicted Bitcoin (BTC) prices with some degree of accuracy over the past two years, has been called into question by some of PlanB’s followers in a recent Twitter poll.
The anonymous analyst surveyed his followers on Monday, asking them what price they thought BTC would reach by the end of the year. He used the results to compare them to a similar survey in March when market sentiment was overwhelmingly bullish.
Of the 124,595 respondents to the latest poll, 41% thought that BTC prices would remain below $100,000 by the end of the year, which would invalidate the S2F model. That’s two and a half times the 16% in the previous poll who thought the lazer-eyes crowd would be disappointed this year.
What a difference 3 months make!— PlanB (@100trillionUSD) June 22, 2021
41% now thinks bitcoin will stay below $100K in 2021 (invalidating S2F model) vs 16% in March (when BTC was $55K). pic.twitter.com/S9PKR8FSnb
PlanB, who originally published the price predictor in March 2019, pinned a message admitting that even he feels a little “uneasy” when BTC prices deviate from the model. However, the analyst noted that the model had managed to hold previously in March 2019, again in March 2020 when the pandemic caused a global market meltdown, and once more in September 2020.
Even for me it is always a bit uneasy when bitcoin price is at the lower bound of the stock-to-flow model. Will it hold (like Mar 2019 when I published S2F, or Mar 2020 Covid, or Sep 2020 with BTC stuck at $10K) and is this another buying opportunity? Or will S2F be invalidated? pic.twitter.com/iIjTC2Ncy3— PlanB (@100trillionUSD) June 23, 2021
Preston Pysh, founder of The Investors Podcast Network, commented that it was difficult for a model to account for a blizzard of bad news that has accelerated the market downturn.
“You mean your model doesn’t account for 40%+ of mining rigs getting banned & forced to turn-off & relocate to various parts of the world...and with no forward notice to companies/entitles for the extraordinary expense to their heavily denominated BTC treasuries/retained earnings.”
The model is a calculation of a ratio based on the existing supply of Bitcoin against how much is entering circulation. The scarcer the asset becomes due to the four-year halving cycles, the higher the price. PlanB’s model predicts an average price of $288,000 over the next three years.
At the time of writing, Bitcoin gained 2.9% over the past 24 hours to trade at $34,450 according to CoinGecko. The asset is currently 45% down from its all-time high of $64,800 on April 14.