BTC-Please welcome today's contestants on "The Price is Right!"
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In my previous post I mentioned that I was again studying the "Stock to Flow" model for pricing Bitcoin. This model does not track averages, chart patterns, Fib levels, support / resistance, nothing of the sort. The model just looks at how many Bitcoin have been mined to date and how many will be mined in the future. Add some math to the current stock of coins vs. the number of years it would take to produce them again and voila! You come up with a price. Very similar to gold when calculation the current gold stock vs. how many years it would take to match it. The stock to flow number for Gold is currently around 62 years. This is what makes gold a scarce asset and a long term store of wealth. The Bitcoin stock to flow number is currently at 27.39 That is how many years it would take to mine the current stock available. After the next halving this number will jump to about 56 and the halving after that it will be over 100 surpassing that of Gold.
At any rate, using just the stock to flow numbers I made a spreadsheet with some interesting discoveries. I looked at today's price as to how it would compare to a future stock to flow value for each month from September 2019 all the way through December 2021.
Here is what I found. As of this post the current price is $8,026.94
This make the current price:
3.91% under valued as of 11/14/2019
247.55% under valued as of 11/24/2020
1,245.28% under valued as of 11/27/2021
Conclusion: If the price remains around the 8K level it will become more and more under valued until it eventually snaps back to the median stock to flow value. The same happens when price climbs way above the current stock to flow value. It goes a few percent over, then 10%, then 15%, then 20%, then 30%, etc. until it finally crashes back to the median value. We are at the low end of the next cycle. If the current price of $8,026.94 were to be the same on 11/27/2021 it would have to jump up 1,245% just to get back to fair value. So basically any prices from $8,300 and lower are an EXTREME bargain when compared to the stock to flow model. For example: The price has to be over 11K by next June just to stay at equilibrium. Neither over valued or under valued.
Here is the data source from which I extracted my spreadsheet information. What I noticed is that price will coil like a spring when it is too far over or under the current stock to flow value and will eventually snap back to the mean. We've already done our "snap back" and going forward it will be time to start climbing up again.
"digitalik.net/btc/"
BBS Out.
At any rate, using just the stock to flow numbers I made a spreadsheet with some interesting discoveries. I looked at today's price as to how it would compare to a future stock to flow value for each month from September 2019 all the way through December 2021.
Here is what I found. As of this post the current price is $8,026.94
This make the current price:
3.91% under valued as of 11/14/2019
247.55% under valued as of 11/24/2020
1,245.28% under valued as of 11/27/2021
Conclusion: If the price remains around the 8K level it will become more and more under valued until it eventually snaps back to the median stock to flow value. The same happens when price climbs way above the current stock to flow value. It goes a few percent over, then 10%, then 15%, then 20%, then 30%, etc. until it finally crashes back to the median value. We are at the low end of the next cycle. If the current price of $8,026.94 were to be the same on 11/27/2021 it would have to jump up 1,245% just to get back to fair value. So basically any prices from $8,300 and lower are an EXTREME bargain when compared to the stock to flow model. For example: The price has to be over 11K by next June just to stay at equilibrium. Neither over valued or under valued.
Here is the data source from which I extracted my spreadsheet information. What I noticed is that price will coil like a spring when it is too far over or under the current stock to flow value and will eventually snap back to the mean. We've already done our "snap back" and going forward it will be time to start climbing up again.
"digitalik.net/btc/"
BBS Out.
Commento
Nice move up.Commento
We need to break up a few more levels...Trade chiuso: obiettivo raggiunto
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