Stock to flow model actually been the most accurate of all models predicting BTC price last years, and it saying we going to 82k by May 2021:
That model make a forecast for Bitcoin price with each 4-years cycle. That's all about that model. Models basically will be built up by inclusive parameters. The best model will be the one the can give the most accuracy with the least inclusive parameters. Best models will be fitted with the Parsimony rule.
Unfortunately, all models are wrong as the famous statistician George Box said and PlanB emphasizes it in his personal website.
The stock-to-flow model is not accurate. People that promote the stock-to-flow model are cherry-picking the data. It has no ability to predict prices.
Many people distort what they use as tool to spread news, FUDs and create hype or panic on the market. Assume that the model is accurate generally, there are points real price and predicted values on the model are not fitted, and people skip those points in their statements.
There are 2 reasons:
- They naively believe in the model and don't notice about those inaccurate points. Even if they see those points, they don't raise questions "WHY?"
- They know those points, know reasons (that I doubt they don't) but intentionally skip it to say what they want to use on media.
Back to the S2F model, there are many parameters that have yet been included in the model. In the future, there are decisive parameters that we have yet known at the moment. Parsimonious rule does not mean future decisive parameters won't have big weights to be included in the model. If the model skips those parameters, it will become more seriously wrong.
