Stock-to-Flow Model Still on Track For $100k Bitcoin in 2021

Bitcoin prices are hovering just below their all-time highs at the moment but longer-term price models such as stock-to-flow are still predicting 400% gains from here.

Bitcoin prices surged to $19,500 a couple of hours ago before retreating back to current levels at $19,150 according to Tradingview.com. This has resulted in the second time this level has been hit as prices above it are proving to be too much resistance for the bulls to overcome.

Even with a large correction from here, long term price models such as stock-to-flow are still on track for huge gains in 2021.

BTW: In linear view the S2F price line looks ridiculous, lol. But this is exactly what also happened in 2013 and 2017. pic.twitter.com/11teZSFpv6

— Bit Harington (@bitharington) December 14, 2020

$100k Bitcoin if History Rhymes

According to the model, Bitcoin prices could reach $100k before the end of 2021. As observed by the analyst, the same thing happened in 2013 and 2017. Looking at previous chart patterns shows the similarities with the peaks and troughs.

We've never had an asset like #bitcoin that grows exponentially. You cant visualise it on a linear scale! Look at the following graphs and see if you can see a pattern: pic.twitter.com/PuvEM2LH18

— Timothy Solomon ⚡???????? (@TimoSolo) December 3, 2020

The stock-to-flow (S2F) model is the brainchild of Bitcoin chart guru ‘PlanB.’ It was initially published in March 2019 and examines the relationship between the production of supply and the current stock available, essentially calculating Bitcoin’s value through scarcity.

The Bitcoin market cap chart looks even better when zoomed out;

#Bitcoin market cap chart.

Nice to zoom out every now and then. pic.twitter.com/5NdyzJeCuF

— Danny Scott (@CoinCornerDanny) December 14, 2020

Current BTC market capitalization is just under $365 billion according to Coingecko which, due to supply differences, is now higher than it was during the all-time high three years ago when it reached $330 billion.

There are a number of other differences between now and back then and one is the amount of time BTC has spent trading above $19k. In December 2017 it was just three days but during the rally three years later it has been a total of 12 days above this level.

This is a clear indication that buyers and holders are not prepared to sell, even at these prices. As one industry observer put it; ‘every time a day trader sells some Bitcoin, an institution is there ready to snap it up’.

Institutional Influence

Institutions have been driving a lot of the momentum this year, which did not happen in 2017 aside from the late entry of BTC futures products which allowed professionals to short the asset (which most of them did).

Yet again, huge crypto funds such as Grayscale have posed record asset under management figures, and the majority of that is Bitcoin.

12/14/20 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.

Total AUM: $13.0 billion$BTC $BCH $ETH $ETC $ZEN $LTC $XLM $XRP $ZEC pic.twitter.com/3KCMu0z8Dy

— Grayscale (@Grayscale) December 14, 2020

2021 could be a wild ride for Bitcoin holders if the current momentum continues, and the mathematical price models indicate that it will.