Stock Flow Bitcoin Prediction Model Shows Possible 2020 Rally

The stock flow prediction model is one that is mostly preferred by the crypto community and grew in popularity this year as well. The method proves that most of the BTC price predictions were accurate so let’s see what the 2020 bitcoin opportunities will be in the following Bitcoin news now.

The stock flow model was initially proposed by the market analyst ‘’PlanB’’ who modeled the BTC price through scarcity earlier this year. The model is described as a ration of the amount of a commodity that is held in inventories or in circulation, divided by the amount produced every year. It has been used for most of the bitcoin price predictions as the halving in May will half the supply and inflation which means doubling the S2F ratio.

The administrator of Dutch Linux Rob Wolfram expanded the research and got deeper into the stock flow model. The researcher noted that the values of extrapolation into the future are different from the values of the next month so testing older values could be more accurate. Both of the previous halving events in 2012 and 2016 caused a huge increase in stock to flow ratio in the following years and Wolfram took the data into consideration to predict a future one rather than using the current data.

A comparison of the logarithmic values has been overlain in the historical BTC price charts in order to anticipate future movements and the charts lined up well. He also extracted the millions of host coins that are held by Satoshi himself. The bitcoin price predictions are mainly on track with those suggested by PlanB:

“It seems that the periods when the stock to flow ratio is rising significantly give the best prediction of the future value. I look forward to seeing the effect of the next halving event in May 2020.”

The model was disputed by the executive editor of the Bloomberg Digital news, Jow Weisenthal who said it is nonsense in his latest controversial tweet. His theory is that the bitcoin supply is not a driving factor for the value of the asset. Currently, Bitcoin holds its price level at $7,000 which places it on point according to all stock flow charts.