Investors should be 'cautious' when using BTC stock-to-flow model: Analyst
An analyst advises caution with Bitcoin's Stock-to-Flow model because it ignores crucial demand-side factors like institutional adoption.Summary
André Dragosch, European head of research at Bitwise, suggests investors should be cautious about relying solely on Bitcoin's Stock-to-Flow (S2F) model, which forecasts a peak price of $222,000 this cycle. The S2F model is criticized because it focuses only on supply reduction via halvings and fails to account for demand-side factors. Dragosch notes that institutional demand, evidenced by Bitcoin ETFs and treasury holdings, currently outweighs the supply reduction from the latest Halving by more than seven times, suggesting these new investment vehicles have established a price floor above $100,000.
This caution comes amid ongoing debate among analysts regarding Bitcoin's potential peak price this cycle. Some, like Geoff Kendrick of Standard Chartered, still predict BTC could reach $200,000 by the end of 2025. Other forecasts, driven by factors like M2 money supply growth, suggest prices as high as $500,000 by 2026. However, industry leaders like Mike Novogratz and Tom Lee express skepticism about the highest targets, with Lee warning that a 50% drawdown remains possible despite institutional adoption.
(Source：Cointelegraph)