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The Famous Bitcoin Model of PlanB Comes Back Once Again As The Next Halving Approaches

Updated: Feb 29

A widely recognized Bitcoin price model takes prominence once again as the next halving of BTC approaches.


Bitcoin
''I calculated bitcoin's monthly SF and value from Dec 2009 to Feb 2019 (111 data points in total). Number of blocks per month can be directly queried from the bitcoin blockchain with Python/RPC/bitcoind. Actual number of blocks differs quite a bit from the theoretical number, because blocks are not produced exactly every 10 minutes (e.g. in the first year 2009 there were significantly less blocks). With the number of blocks per month and known block subsidy, you can calculate flow and stock. I corrected for lost coins by arbitrarily disregarding the first million coins (7 months) in the SF calculation. More accurate adjusting for lost coins will be a subject for future research.'' Plan B said.

Bitcoin price data can be sourced from various channels, commencing in July 2010. I have incorporated the initial known bitcoin values, such as $1 for 1309 BTC in October 2009, the inaugural quote of $0.003 on BitcoinMarket in March 2010, and the famous purchase of two pizzas for 10,000 BTC valued at $41 in May 2010, utilizing interpolation to fill gaps.


Moreover, Plan B have established data points for gold (SF 62, market value $8.5 trillion) and silver (SF 22, market value $308 billion), serving as benchmarks for comparison.


According to a tweet the famous analyst did on 6/12/23, 91% of all bitcoin are in profit as seen in the chart below.



Despite the ongoing price fluctuations, a considerable number of investors and analysts maintain optimistic expectations regarding the forthcoming Bitcoin block reward halving and its potential positive impact on the price.


PlanB's stock-to-flow (S2F) model illustrates the correlation between Bitcoin's halving events and its price dynamics. The foundational premise of this theory is that the value of an asset increases as its scarcity grows.


The stock-to-flow ratio is computed by dividing the current stock (total supply) of Bitcoin by the annual flow (new supply). For instance, gold boasts a stock-to-flow ratio of approximately 62, indicating that it would take around 62 years for newly mined coins to match the total existing amount of gold.


Check out the link of the S2F Model here: https://medium.com/@100trillionUSD



Photo by Kanchanara on Unsplash

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