Somewhere between $400K – $1 million. And, this is not a wild guess.
The numbers are from the popular Bitcoin’s stock-to-flow price model, which has been approved by many analysts and crypto experts. Also, it is the most accurate price model for Bitcoin.
The Bitcoin Stock-to-Flow price model forecasts the price of Bitcoin based on the current stock of Bitcoin against the flow rate of new Bitcoin in the market. Let’s understand it in detail.
The stock to flow model predicts the price of resources that are scarce and have a low rate of supply, for instance, gold.
According to the world gold council estimates, around 190,000 tonnes of gold have been mined to date and currently, only 2500-3000 tonnes of gold is added to the reserves annually.
Therefore, using the two metrics, you can calculate the gold’s stock to flow ratio. And, the higher the ratio, the less new supply enters the ratio.
Also, it tells the amount of time required to reach the current level of the gold reserve with the current mining rate. For example, gold has an S2F ratio of 62, which means, at current mining rate, it will take around 62 years to reach the current level.
Stock to Flow Chart of Precious Commodities
Bitcoin has an S2F ratio of 52, which increased from 25 after the 20th May 2020 Bitcoin halving. And, the same ratio is expected to go up to 113 in the next halving process, which is scheduled around 2024, making it one of the most scarce assets (scarcer than gold) the world has ever seen.
Stock to Flow Chart of Bitcoin
As per the S2F chart, Bitcoin price is expected to reach the $100k milestone by December 2021 and $1 million by the end of this decade.
In the last two halving events, Bitcoin has moved as per the S2F forecast and has made a new peak following every halving. And, in the recent one, Bitcoin is clearly showing strengths and has banished the theory of bubble.