The Stock to Flow (S2F) model, which failed to predict the 2021 Bitcoin market tops, is receiving renewed attention as Bitcoin prices fluctuate around the $38-$48K range. S2F, a measure of scarcity defined as the circulating coins divided by newly supplied coins, is seen as a valuable pricing tool for identifying future market trends. The model's relevance was evident in 2021, when it provided clear exit signals at critical price levels. With the model's enhanced predictive capabilities, it's worth keeping an eye on its projected value for Bitcoin in 2024/25.
In Bitcoin's early years, the S2F model revealed that price remained below S2F targets, indicating a prime time to invest. Looking forward, the model's insights and historical performance warrant attention as the cryptocurrency market continues to evolve.