Bitcoin Is Not Realigning With Stock-To-Flow: Deflection At 1-Month Low

The world's first cryptocurrency Bitcoin BTC/USD is refusing to realign its price with the stock-to-flow (S2F) model just as it reaches halfway to the next halving that will cut its inflation rate once again.

What Happened: Bitcoin's stock-to-flow deflection seven-day moving average chart by blockchain data firm Glassnode shows that the metric is currently at its one-month low of 0.356.

See Also: How To Earn Free Crypto

The stock-to-flow deflection is the ratio between the current Bitcoin price and the one estimated by the S2F model. When its value exceeds one it means Bitcoin is overvalued according to S2F, otherwise undervalued. In other words, Bitcoin at its current price of more than $38,500 is worth only 35.6% of what it should be worth according to the S2F model.

The stock-to-flow is a quantitative model that attempts to predict the price of Bitcoin in the future as far as 2026 by considering its issuance rate, which results in the estimated value going parabolic every time the network undergoes a block reward halving. The model, introduced in the first quarter of 2019, agrees with Bitcoin's historical price to a surprising degree, largely by going parabolic after each halving.

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