Investors should be 'cautious' when using BTC stock-to-flow model: Analyst

The stock-to-flow model may not be the best framework to forecast Bitcoin prices, Bitwise investment analyst André Dragosch said.

Bitcoin’s (BTC) Stock-to-Flow (S2F) model, one of the most widely cited BTC valuation frameworks, forecasts a peak price of $222,000 during this market cycle, but investors should exercise caution when using the model, according to André Dragosch, the European head of research at investment firm Bitwise.

The Stock-to-Flow model does not take into account demand-side factors, and instead, centers its price modeling on Bitcoin’s halvings, which reduce the amount of newly issued BTC by half every four years, Dragosch said. He added:

Exchange-traded funds, ETPs, and other Bitcoin investment vehicles have created a price floor for BTC, supporting prices above the $100,000 level.

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