Topic: Stock-to-Flow Model: Modeling Bitcoin's Value with Scarcity - page 7. (Read 5758 times)

When I say gold parity I am thinking about t market capitalisation. As we now are at 1Trln while gold is at 11 Trln, then I am saying that in order to achieve this price must improve tenfold (neglecting the effect of newly mined coins).
So, in this sense also price is involved.
Hope it clarifies, @acquafredda.

That is great news with only one caveat dear filli! Gold parity not referring to price please!!! In terms of capitalization we will get there in around 10 years at this pace.
If the institutionals are followed by smart retailers we can get there very easily, not mentioning that many gold bugs could convert to crypto some % of their holdings.
It is doable.

Very good point.
In addition, the source of the website you suggested, is the same PlanB used in his article, so market cap is directly transferable into his model.

On the big picture anyway anything changes, but I reckon all the dots should move also.

I will try to tweet him. Let’s see what happens.

Hey, no. As I was thinking, that article is from back in April. Since then Silver Market Cap has more than doubled.

https://companiesmarketcap.com/silver/marketcap/

"Silver's Market Cap

Estimated Market Cap: $1.496 T

The Market Capitalization of Silver is currently arround $1.496 T.

This value was obtained by multiplying the current silver price ($27.37 per once) with the amount of silver that is estimated to have been mined so far."

A good website to follow Bitcoin market cap vs other assets is:

https://companiesmarketcap.com/assets-by-market-cap/



As you can see we aren't there yet but I don't think it will take too long with the current trend.

According to his article:

https://medium.com/@100trillionUSD/bitcoin-stock-to-flow-cross-asset-model-50d260feed12



The original link in the paper is broken, but you can check it here:
https://www.cpmgroup.com/how-much-silver-is-above-ground/

So your sources are probably different from his.

Hey, am I reading that graph incorrectly? The way I see it, according to the graph we should have passed the silver market cap but in reality we haven't done so yet. We are approximately $0.5T short.

I don't know if I'm wrong or that chart has old data not updated.

Today Bitcoin surpassed, for the first time in history, a market capitalisation of 1 Trillion of dollars:

This is not a finish line, but a good start for the next target: Gold Parity.

https://twitter.com/100trillionUSD/status/1361965084831064064

This graph is from the Xasset Model, where PlanB shows different asset classes, with different S2F lays on the same straight line.
Bitcoin, whose S2F is slowly moving to higher and higher levels, is moving across the line.

Not considering the fact that new gold mines could be discovered anytime or, if that crazy Elon starts searching the space, a huge space gold rush could well start.
Yes, with bitcoin that is out of option: we cannot have more than actually designed by the protocol.

Here is the thing: if the price of gold goes up, what happens? The gold miners become more effective and mine more gold.

If the price of bitcoin goes up? The bitcoin miners still mine whatever is the limit based on the difficulty. It's still only one block per 10 minutes. And we will never have more than 21 million.

The 14th halving will happen sometime near 2064. The block reward will be 0.003 BTC. By the next halving after that, there will be only 20,999,359 bitcoins.

Some of us may still be alive to see that year.

All this will take a certain amount of time and we will not forget about such a concept as economic feasibility. Also, rarity is a relative concept and for the future bred population of the current precious metals may also be few or other metals will be used as precious metals. For example, now palladium is more expensive than gold, and before that, platinum was in a similar role, although of course gold is in a special position due to historical reasons.

This is why Bitcoin is immensely more precious than Gold: it’s scarcity is based on cryptographically secured math, not on the randomness in finding a nuggets in this or any other planets.

Gold will remain as scarce jewelry, although I personally like silver / platinum better. I actually prefer either stainless steel or tungsten because they are so physical and will endure, not melt under high temperatures.

In audiophille hi-fi systems, silver conducts better than gold, so there are silver interconnects. I honestly can't tell the difference and copper is good enough for me, as my source audio is digital anyways.

Maybe in 100 years, the only SOV left will be digital ones, mostly BTC, as they can be made "physical" in the form of paper wallets, or collectible coins, or open dimes, or steel stamped private keys or something such.

Once we start going out to space, mars, the moon, anywhere, all these precious metals will just be another element in the periodic table and not be rare enough. They will be useful and have function and value, but they will be everywhere.

@PlanB updated onte of the most bullish chart, and the one I like the most!


https://twitter.com/100trillionusd/status/1361276566756540416?s=21

This is one of the most intriguing S2F graph, because, as we already commented, means BTC is actually gaining when measured against the most resilient SoV: Gold.

This means that Bitcoin is finally becoming a viable Store of Value and is taking premium from Gold,

PlanB further details on the matter answereing in the comment:




I tend to agree with the first hypothesis. And I am rooting for Bitcoin sucking up all the store of value functions from less than optional other SOV, sending them back to their industrial value...

I believe the model will be accurate as it is based on supply / demand, stock to flow ... how many coins are being mined, how many are available. It's a broad general model that constantly gets adjusted of course, it is not static.

So it will get updated every halving, which is every 4 years. Beyond that time frame, no one's predictions are really accurate.

The so called "end game" implies an absurd number for many people of at least 10 million to 50 million to 100 million USD, but that is very far away, likely several decades from now.

Pre-halving, I was a huge skeptic of this model, but right now I'm in total awe that the model is currently actually accurate as hell. The model is literally being followed like clockwork.

What I'm not sure, is if the model is just really really accurate, or if at this point it's just ended up being a self-fulfilling prophecy. That, and up to what point will the model actually be followed. Because at some point in the future, I expect the model to be invalidated. Regardless if it goes far higher or far lower than the model expects.

Interesting tweet by Plan B.
He superimpose fractals, with two different versions of his model:






In any case, interesting times ahead.

Not only are the Italians passionate, they are also quick... (hopefully not too quick or many of their ladies will be disappointed)

Sure enough, I looked at my podcast feed, and I saw the header of the PlanB as SLP's guest.  I will listen to that interview later today and see if I have any comments to add here...  I will say that I have heard PlanB's previous interviews on SLP (probably all the previous ones - even though I would probably learn a lot by listening again.. but there are only so many hours in a day)...  

Edit:  I listened to the one hour long podcast interview, and besides the topics listed above largely I would conclude that PlanB was reiterating that the stock to flow model is largely on track and maybe a bit above expected performance at the time of the interview, but not out of line with how any model may well have deviations from the mathematical expectations.  It might well be noted that he believes that both his model and BTC price performance is providing a decent amount of evidence that the increasing cycle theory is bullshit (hahahahahaha.. he did not use the word bullshit, but still)..    Also the priced-in theory as a frequent S2F model criticism seems to ongoingly undermined by BTC price performance ongoingly correlating with the stock to flow model rather than nonsensical priced-in baloney (again, PlanB did not phrase it like that, exactly.. he was more diplomatic than me).

PlanB has been interviewed for the fifth time by Stephan Livera!


https://twitter.com/stephanlivera/status/1350046657090523136?s=20





What they talked about on this podcast:


You can listen to the podcast clicking here


Previous Stephan Livera podcasts with PlanB

does not have to hold in the future, as any other calculation for price or a model, just like PlanB did not have to, when published, but seems to be holding up to this moment, and parameters are adjusted during time to reflect actual price change, but formula is good for now

thank you for opinion, it is good to have some reflection on each read, for a better understanding of what is happening on the market

I’m highly sceptical on this article.
The real big difference between this article and the stock to flow is the fact that stock to flow has been able to reliably forecast bitcoin prices since 2012(before the first halving), while this “model” has been back tested on data, but don’t provide any rationale with actual prices on why price should follow an exponential curve.
So, nice read, but I fail to understand: looks like a good fit, but why should it hold in the future?