The Bitcoin Stock To Flow (S2FX) Model Is Broken And that Matters – S2FX.
Is this signalling an overall Crypto Crash?
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Bitcoin has been making headlines lately. Investors are wondering if it’s a bubble or the future of money.
When you look at the Bitcoin price chart, it looks like this is all speculative froth – but when you understand how Bitcoin works, and what drives its valuation in the first place, that changes everything.
The Bitcoin Stock To Flow Model (STFM) is a theoretical model that predicts future bitcoin prices. But is this model broken for Bitcoin? The STFM assumes that the supply of bitcoin will be fixed and the price will increase as demand increases. But what if this doesn’t work?
The truth is, the stock to flow ratio has already been used for decades in the commodities markets. The stock to flow ratio is a theoretical measure of the number of stocks in circulation and is divided by the annual production flow.
So are the Bitcoin gurus who use S2FX, using a flawed formula?
These gurus say the Stock-to-Flow Cross Asset Model (or S2FX for short) can accurately “price” not just assets like Bitcoin, but also things like gold and silver.
Former university math professor and legendary resource investor Marin breaks it down and discusses it in relation to Gold, Silver, Bitcoin, Edward Thorp, Einstein, Elvis, Ace Frehley, and even Stradivarius Violins.
Timeline:
00:00 Introduction to Stock to Flow Cross Asset (S2FX) model.
03:55 S2FX Model’s potential for massive profits?
04:05 Revolutionary math man Edward Thorp, father of card counting.
05:38 Evaluating the S2FX model.
06:19 Bitcoin Phase Transitions, and a new way of thinking about Bitcoin.
07:41 Katusa’s Comments regarding Phase Transitions of Bitcoin.
08:42 Part 2 of the Author’s S2FX Model, halvings, abrupt transitions and how it applies to Bitcoin.
09:40 Katusa’s Comments regarding Part 2, and how Bitcoin has no guarantee of seeing another phase.
11:59 Part 3 of the Author’s S2FX Model, the four Bitcoin clusters indicating phase transitions.
13:18 Katusa’s Comments regarding Part 3, the issue regarding clusters. Exposing two problems.
16:20 Part 4 of the Author’s S2FX Model, how it applies to Gold and Silver.
17:18 Katusa’s Comments regarding Part 4, why S2FX is way off for Gold and Silver and not valid.
19:39 Part 5 of the Author’s S2FX Model, regression analysis and why the model can estimate Bitcoin’s market value.
20:33 Katusa’s Comments regarding Part 5, explaining and simplifying the formula, and why S2FX model does not predict prices.
21:46 Part 6 of the Author’s S2FX Model.
23:04 Katusa’s Comments on Part 6, a model that predicts future results solely based on past performance is not a very good model.
25:16 Part 7 (Conclusion) of the Author’s S2FX Model, formula has a perfect fit to Bitcoin data.
26:07 Katusa’s Comments on the Author’s Conclusions.
27:48 Variance in Bitcoin Prices VS Variance in SF Ratio.
31:27 Concept of Unforgeable Costliness, Antonio Stradivari and his violins.
34:40 Gold’s Market Cap VS SF Ratio.
36:38 Katusa’s final conclusion.
If you liked this video, check out more of them here:
US Dollar Collapse:
https://youtu.be/oLrB5c0W7Og
Silver Short Squeeze:
https://youtu.be/u4VKCLONPLM
Preparing For Chaos:
https://youtu.be/AuQ-uCtmNz0
#Bitcoin #S2FX #StocktoFlow #bitcoinbubble #Bitcoinbroken #Cryptocrash #BTC
