Using these inputs, S2F uses a linear regression to model the future price of Bitcoin. In a nutshell, the model essentially says: As the supply of Bit

You don’t need S2F to value Bitcoin

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2021-06-16 10:30:09

Using these inputs, S2F uses a linear regression to model the future price of Bitcoin. In a nutshell, the model essentially says:

As the supply of Bitcoin diminishes over time, if Bitcoin’s price follows a similar trajectory to prior years, that price will increase in a way that is directly correlated to the diminishing newly mined supply.

The primary argument for the veracity of this model is that since it was created in 2019, it has been very accurate in predicting the price trend of Bitcoin.

I do believe Bitcoin will increa se in value — but not as a direct result of the halving schedule. I believe its price will reflect its ever-increasing levels of adoption. A such, I think S2F doesn’t provide a lot of value in terms of explanatory or predictive power. Here’s why.

The first, obvious argument is: how can you possibly predict the price of an asset using only the available supply (and future available supply) as a variable, but not treating demand as a variable?