Bitcoin Halving 2024: Why the Stock-to-Flow Model Will Break This Cycle
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- Опубликовано: 1 июл 2024
- It's April 19, 2024: Bitcoin's 4th Halving is happening today! The block reward, doled out every 10 minutes, will drop from 6.25 to 3.125 BTC.
That translates into an inflation rate of only 0.85%, far less than gold or any other currency.
From now until 2140, the inflation rate will slowly decrease to zero.
This explains why Bitcoin has appreciated against inflating currencies over several years -and that it will continue since governments will always recklessly print money.
In this episode, we celebrate the BTC Halving by reviewing Plan B's stock-to-flow (S2F) model, which I first critiqued at the previous halving in 2020. Back then, I predicted that the model would break in 2024 and beyond.
My original article/video are here:
francistapon.com/Work/WanderL...
Because the article and video were so viral, I've been reviewing the model's state annually.
This update is extra special because it's the 2024 Halving.
Watch the 9-minute video below to see why I still believe what I said in 2020: that this year, the stock-to-flow model will begin to crack.
As I explained in the video, the divergence between the two most recent models and reality is already happening.
Only the original and most conservative S2F model remains viable. But in 2025 and definitely by 2026, you'll see that model will become as useless as the last two S2F models.
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PlanB has lost the plot on the last run, he never sold. He's been done for a while. Nice run though.
its pretty obvious the model cannot hold in the long term. It is simply impossible because flow eventualy will go to zero and dividing by zero will make the price go to invinity. The only question is, when wil it divert.
Agreed 💯 my video gives the answer. The diversion starts now and will be obvious by 2026 and beyond
Hmm as far as I understand, the flow will never go to 0. Since bitcoin is infinitely divisible, it will continue halving infinitely. Remember, if a bitcoin is lost, it can never be recovered. The eventual decrease in bitcoin due to loss combined with the halvings decreasing the flow, it's very possible this model could continue holding into the medium future
@@MinMax123 the flow goes to zero around 2140. But the models will all break well before 2040.
@@MinMax123Btc is not infinitely divisible. Only down to 1 sat. The block reward does eventually become zero at total supply saturation, the only mining revenues will be fees. That happens sooner than at 1 sat reward. But even if it didn't, the reward would "halve" from 1 sat to zero. There are no half sats.
But what about BlackRock, Fidelity, Microstrategies, and all the other countries buying up all the bitcoin? Won't that make this cycle different ?
Great question. In theory, if enough buyers materialize, BTC can zoom to $1-5 million by 2030.
But given the logarithmic regression and the law of diminishing returns, this scenario is extremely unlikely, which is why the S2F models will fail.
But those entities you mentioned will take us to 6 figures. It's just that S2F needs 7 figures this decade.