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Bitwise CIO Matt Hougan says the Bitcoin stock‑to‑flow model is losing relevance as price falls below $60K and Strategy’s preferred stock unwinds, signaling a
Bitcoin slipped below $60,000 on July 1, 2026, prompting Bitwise Asset Management’s chief investment officer to question the relevance of the stock‑to‑flow (S2F) valuation model and to flag a possible market bottom later this fall [1].
| At a glance | |
|---|---|
| Price | < $60,000 |
| Recent move | Down ~5% from early‑June highs |
| Catalyst | Strategy (NASDAQ:MSTR) perpetual preferred stock (STRC) price drop to ~$75 and dividend adjustment |
| Outlook | Bitwise expects a new bull market to start in the autumn, citing institutional demand shifts |
Strategy’s perpetual preferred stock (ticker STRC), launched near a $100 par value to offer high yields, attracted large inflows during the prior rally. The firm used those proceeds to buy Bitcoin aggressively, becoming one of the most consistent large‑scale buyers. As Bitcoin corrected, STRC’s market price fell sharply to around $75, raising concerns about dividend sustainability and sparking broader market unease [1]. In response, Strategy raised its dividend rate to 12 % and introduced a framework to periodically sell Bitcoin to meet obligations while preserving cash reserves.
Hougan frames the STRC unwind as a typical cycle feature: “When conditions change, that excess must exit before a durable bottom can form.” He argues that the traditional S2F model, which links Bitcoin’s scarcity to price, is losing explanatory power as demand shifts from yield‑seeking structures like STRC to “global banks, asset managers, pension funds, sovereign wealth funds, and financial advisors” [1]. He points to expanding Bitcoin ETF availability and new products from firms such as Morgan Stanley as early signs of this institutional pivot.
Hougan suggests several metrics to watch for confirmation of a bottom: MSTR trading at a discount to its Bitcoin holdings, extreme readings on fear‑and‑greed sentiment indicators, and negative funding rates in derivatives markets that reflect heavy short interest [1]. While acknowledging that Bitcoin could dip lower in the short term, he emphasizes that the current phase is “clearing away structures that no longer align with Bitcoin’s maturing market,” setting the stage for renewed upside later in the year.
CryptoQuant data shows whale inflows to Binance have cooled sharply since mid‑June, with a 30‑day rolling value drop of nearly $2.4 billion, while retail inflows fell more modestly from $10.02 billion to $8.2 billion [2]. The reduced large‑holder outflows narrow the supply pressure on exchanges, though the overall impact on price remains uncertain.
The significance lies in whether Bitcoin’s price can hold the $60‑61 K band while institutional demand replaces yield‑driven structures, a shift that could validate Hougan’s skepticism of the S2F model and set the stage for the anticipated autumn bull market.
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AI-assisted synthesis by the TrendWatcher Editorial Desk · sourced from 2 outlets · Jul 8, 2026 · How we report
PlanB's S2F model predicts an average price of around $500,000 for Bitcoin during the 2024‑2028 halving cycle, while other forecasts range from $200,000 to $222,000.
Critics argue the model focuses only on supply reductions from halvings and does not incorporate demand‑side factors such as institutional investment, which currently outweighs supply reductions by over sevenfold.
Growth in Bitcoin exchange‑traded products and treasury holdings has helped establish a price floor above $100,000, according to Bitwise analyst André Dragosch.