Bitcoin Stock-to-Flow Model Accuracy and Price Targets

Bitcoin is trading near $64,000, leaving the widely followed stock-to-flow (S2F) price model roughly 87 percent below its projected cycle average of $500,000 [1]. As the asset passes the midpoint of the 2024–2028 halving cycle, the discrepancy between the model’s scarcity-based predictions and current market reality has reached a critical threshold [1].

The math behind the model

The stock-to-flow model, popularized by the analyst known as PlanB, calculates value by dividing an asset's total existing supply by its annual production [1]. By this metric, Bitcoin’s scarcity increased significantly following the April 2024 halving, with its ratio jumping to approximately 119—a level that surpasses gold’s ratio of roughly 62 [1]. The model uses this ratio to predict market value through a regression equation, which historically suggested a price trajectory reaching into the hundreds of thousands of dollars [1].

However, the model has struggled to align with actual price action. While the original 2019 equation implies a Bitcoin value of roughly $770,000 based on current supply, the asset remains far below that mark [1]. Even when accounting for the model-maker’s more conservative cycle-average estimate of $500,000, Bitcoin’s current price of $64,000 represents a substantial deviation [1]. This gap is particularly notable given that the asset is now roughly 28 months into its 48-month cycle, leaving limited time for the model to reconcile with market prices before the next halving resets the supply-side math in 2028 [1].

The challenge of the remaining cycle

For the S2F model to reach its $500,000 average target by the next halving, Bitcoin would need to sustain an unprecedented growth pace. Achieving this target within the remaining 20 months would require a monthly compounding growth rate of approximately 11 percent, without any significant drawdowns [1]. Even reaching the lower end of the model's projected range of $250,000 would necessitate a consistent monthly gain of roughly 7 percent [1].

Critics of the model argue that while the stock-to-flow ratio is a useful tool for understanding relative scarcity, it does not function as a deterministic price predictor [1]. The model has faced repeated scrutiny for its failure to account for market volatility, as Bitcoin has previously peaked near $69,000 in November 2021 and bottomed under $16,000, far from the model's earlier forecasts [1].

What to watch

• Monthly Price Trajectory: Monitor whether Bitcoin can maintain the 7–11 percent monthly growth required to approach the model’s lower-bound or average targets before the 2028 halving [1].
• Cycle Midpoint Performance: Observe if the asset shows a trend reversal in the latter half of the 2024–2028 cycle, as the model relies on the scarcity ratio to drive value over the full four-year period [1].

The coming 20 months serve as a final test for the S2F model, as the arithmetic leaves little room for the price to catch up to the model’s projections before the next halving resets the scarcity ratio [1]. Whether the model remains a relevant framework or is viewed as having run out of road depends on its ability to bridge the current 87 percent shortfall against its own stated targets [1].