The stock to flow ex-model formula can be used to estimate the market value of the next BTC face slash cluster of five point five trillion U.S. dollars. This translates into a BTC price given 19 million Bitcoin in 22 to 24 of two hundred and eighty-eight thousand U.S. dollars per Bitcoin. Probably by now. You already heard about it. Plan B or at one trillion USD on Twitter published his third Bitcoin article. He’s the original author of the Bitcoin Stock to Flow model, which got translated in multiple languages. Professional financial institutions out there are using the stock to flow model for their bitcoin price forecasts for their Bitcoin price predictions. And now we got the third article published a couple of hours ago. The Bitcoin stock to flow cross-asset model. In today’s episode, we’re going to go through the whole article and going to explain exactly what this is all about and why the price of Bitcoin based on this analysis will go to two hundred and eighty-eight thousand U.S. dollars. And if you like this kind of content, please make sure to leave a like that is very much appreciated and completely for free. And now let’s jump right into it. All right. Now, for all those people out there who have absolutely no idea what the stock to flow model is all about. Make sure you check out the first article of Plan B, modelling Bitcoin’s value with scarcity. All the links we’re going to discuss will be down below in that description. Just to explain it in a few words with the stock to flow model is all about. It basically measures the relationship between the stock and the incoming flow of a specific asset. So let’s make a quick example with gold. We have an existing pile of gold already on this planet, which is already mined, but we still have some in the ground. So some of the gold is getting mined every year and that is the flow. And if we compare to stock to the incoming flow, that basically tells us how much this asset is getting inflated. And as all of you guys know, the inflation of Bitcoin is getting cut in half every four years. So the stock, the flow ratio is getting doubled every four years. But it’s also getting higher every single day because the stock is getting bigger every 10 minutes after every block is getting mined and the flow stays the same for the four years. So we have a growing stock to flow ratio in Bitcoin, and that makes the asset very Schaus. That is basically the main part here. But what we have right now is an updated stock to flow model across asset model. And we’re gonna go through this whole article and I’m gonna explain you everything in simple words, or at least I try to. So first of all, here we have to introduction Bitcoin stock to floor model was published in March 2019. Once again, link down below the original Bitcoin Start to flow model is a formula based on the monthly stock to flow and price data. Since the data points are indexed in time order, it is a time serious model. This model has activated quantitative analysts around the world. Many have verified the non-Sperry’s relationship between stock to flow and bitcoin price. If you’re not familiar with the stock to slow model, I highly recommend reading the original article because it explains background and terminology in this article. I solidified the basis of the current stock to flow model by removing time and adding other assets, silver and gold to the model. I call this new model the Bitcoin stock to float cross-asset or as two effects model as the effects model enables valuation of different assets like silver, gold and bitcoin. With one formula, first, I will describe the concept of phase transitions because it introduces a new way of thinking about bitcoin and stock to flow. It explains why to stock to flow ex-model is important. Second, I will describe destructible ex-model, how it works and what the results mean. Transitions. And this is actually something which is very interesting, what he’s talking about in here. Some of the examples seem to be a little far fetched and not quite comparable to Bitcoin. But what he is describing in here is very interesting. And I really don’t want to leave this out because if we come to Bitcoin, this is very, very interesting phase transition or an important perspective in understanding to start to flow ex-model during phase transitions, things get totally different properties. Transitions are often contained. His three examples of face magicians are water, the U.S. dollar or bitcoin. And then he’s basically here. The four different stages of water, solid-liquid guest ionised and they all have other properties. Obviously now the U.S. dollar and here are already talking about the currency and therefore money. So here it starts to get interesting. Face transitions are also present in finance. For example, the U.S. dollar has transitioned from the gold coin. Dollar. Three hundred and seventy-one grains of pure silver equals twenty-four grains of gold. Two paper backed by gold and gold coin payable to the bearer on demand. Two paper backed by nothing. This note is legal tender for all debts, public and private, although we keep calling. The dollar has totally different meaning in these faces and I would say that we all agree on that. It is totally different if it’s a gold coin backed by gold or just fiat money as we have it right now. But now we’re coming to Bitcoin and here it’s already getting very, very interesting. Same is true for Bitcoin. Nick Carter and Hassel showing their 2018 study how bitcoin narratives changed over time. And this is so interesting. So what we can see right here are different stages of Bitcoin over time. And as you can see, since the inception, a lot changed from a cash proof of concept over cheap payments network, anonymous darknet currency, reserve currency for crypto censorship, resistance, e-gold, programmable, shared database, uncorrelated financial asset. You can definitely see the development right here that Bitcoin went through. And for those people who are watching my YouTube channel for a bit, you guys know that we were coming from a medium of exchange to a store of value over time because Bitcoin is not ready yet to be a medium of exchange. It is still too volatile. I mean, the second layers are not really as established as we thought they would be by this time right now. So Bitcoin a store of value right now. So the narrative can change over time. So I totally agree on here. These Bitcoin narratives seem very continuous in the chart. However, if you combine the narratives with financial milestones and later stock to flow and price data, they look very much like faces with more abrupt transitions. And here it’s getting very interesting. The first proof of concept after the Bitcoin white paper. Then secondly, payments off there. The U.S. dollar parity. So when it got traded first and then e-gold after the first tall thing, almost gold parity, one bitcoin equals one ounce of gold. And then for a financial asset, after the second troughing, one billion U.S. dollar transactions per day. Milestone legal clarity in Japan and Australia. Futures market at CMG and backed. We all remember the debt. So you can see the different faces in here and they are on deniable. So here I totally agree, or so far I totally agree. This three example of face transitions in water, U.S. dollar and bitcoin offer a new perspective on Bitcoin and the stock to flow. It is important to not only think in terms of continuous-time series but also in phases with abrupt transitions, very important in developing a stock to full X model across the model. I see Bitcoin in each face as a new asset with totally different properties. A logical next step is identifying and quantifying bitcoins face transitions. So what are you saying here is that in all these different faces, we have different use cases pretty much for Bitcoin or different narratives for Bitcoin. We have to re-evaluate the situation. That is basically what he’s saying. And so far, what we have seen is that in the four-year cycles to haul things, they had a huge impact on changing the faces in here. So far, so good. Then the chart below shows the monthly Bitcoin stock to flow in price data points used in the original stock, the floor model. One can visually identify four clusters, and we can clearly see in this chart that, yes, there are those four clusters. Quantifying these clusters can be done by minimizing the distance between monthly Bitcoin data and clusters. I use a generic algorithm minimizing the absolute distance to quantify for clusters. Future research could focus on different clustering algorithms. So this is not really about how exactly we’re going to identify those clusters. But if it just has a look at the chart, we can see. OK, well, yes, there are these clusters. Each of the four identified Bitcoin clusters has a very different stock. The flu market value combination that seems to be consistent Woodhall things and changing Bitcoin narratives. Bitcoin proof of concept bitcoin payments. Bitcoin E-gold bitcoin financial assets. On the first step, only a one million market cap, then fifty-eight million market cap, then five point six billion market cap already and currently around one hundred and fourteen billion or somewhere in that range like water and U.S. dollar. These four bitcoin clusters represent four different assets, each with different narrative and characteristics. Bitcoin proof of concept would start to flow one point three and only one million market cap. Valot is a totally different asset than Bitcoin. The financial asset would stop the flow of twenty-five and one hundred fourteen billion market value and that totally makes sense. We have a way, way higher stock to flow ratio right now and also a way higher market cap, ok. That is what the stock, the flow model predicted and that is exactly what happened. So. Yes, I agree with that, we have to see Bitcoin as a different asset right now. Different narratives, different properties, kinda, and definitely different use cases with the phase transition perspective of Bitcoin clusters as different assets. I can now add other assets like silver and gold to the model. Now it’s getting very interesting. This makes it a real cross-asset model for silver and gold. I use stock and flow numbers from a recent analysis by John Norvan Hoys. I have no idea how to pronounce that name. I’m very sorry. And Ultimo, December 2019, prices from trading view. And as you can see right now in this chart right here, what we have are the four Bitcoin clusters, close to one proof of concept cluster. Two payments cluster, three E-gold cluster for the financial asset. Then we have silver right here and gold right here. So this is absolutely interesting because what we can see right now, we’re going to skip the math in here. So what we have right now, and this is the most important part and the biggest difference to the traditional stock, the flow model is right now we don’t have an extra percolation. This is what the stock to flow model was doing. But now we have an intro appellation. We cannot actually predict the price of Bitcoin on this ACCIES but not just somewhere out there, but in between, because we now have silver and gold, which are still ahead of us on this linear line here on this linear regression line here. And if he calculates everything and does a Bitcoin, not extrapolation, but interpellation, it predicts the price of Bitcoin. This translates into a Bitcoin price given 19 million bitcoin in 2020 to 2024 of two hundred and eighty-two thousand U.S. dollars per Bitcoin. Now, let me know your opinion. There is a pub popping up on top of his screen right now. Do you believe that Bitcoin will reach two hundred and eighty-eight thousand U.S. dollars somewhere between 2020 and 2024? And also, definitely let me know your comment down below. Do you think that is possible? Do you think that is realistic or is this completely on probable? But that is it all ready for today’s episode. Once again, if you enjoyed it, please make sure to hit the like button. Very much appreciated. If you want to support, even more, you can check out my affiliate links down below in the description and also comments section. If you’re interested in lever trading, for example, you can find my top three recommended leverage trading platforms right here. Thank you guys very much for your awesome support lately. I’m very interested in your comment and hopefully see all of you tomorrow in the next one by.


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