This indicator says that after the half of 2028 Bitcoin will reach 5 million dollars

As the 2024 Bitcoin halving approaches, investors are speculating about the impact of increased scarcity on Bitcoin's price. Among the many methods for predicting the price of Bitcoin, the Bitcoin Stock-to-Flow (S2F) model stands out.

Popularized by X (formerly Twitter) Planby, the S2F model draws from traditional stock-to-flow ratios used in commodity markets, such as gold and silver, to make surprising predictions for Bitcoin's future price.

$5 million target after 2028 bitcoin compensation

The stock-to-flow ratio, a measure of scarcity, is calculated by dividing the total amount of goods sold by the annual production rate. A higher ratio indicates a greater scarcity and consequently a higher price.

Bitcoin's unique structure, with a total supply capital of 21 million BTC and a declining mining rate due to halving, provides a compelling case for the S2F model. Halves, which occur roughly every four years, halve the circulating supply of new BTC. Therefore, it indicates an increase in stock-to-flow ratio and an increase in value.

Read more: Bitcoin Half Cycles and Investment Strategies: What You Need to Know

Applying the S2F model to Bitcoin has been a topic of intense debate. While it is consistent with some historical price trends, critics argue that it makes it too easy. Therefore, it ignores other market dynamics such as demand, technological developments, regulatory changes, and broader economic conditions.

“Stock-to-flow is not really good right now. I know it's rude to brag, but I think giving people a false sense of certainty and the likelihood that their numbers will come out is harmful and derisive financial models. he said.

Despite these criticisms, the S2F model has received a resurgence in its predictions, especially following the April 2024 bitcoin price halving to $532,400. However, it is the 2028 halving forecast that is grabbing the headlines.

According to the creator of the model, Planby, Bitcoin is expected to reach a staggering $5 million.

“That's basically all you need to know, and of course a wide margin of error. By the way, 5 halved – 6 halved: the average price is $5 million,” Planby said.

Read more: Bitcoin price prediction for 2024/2025/2030

It is important to note that financial markets are inherently unpredictable and influenced by a variety of factors beyond scarcity. The S2F model, while intuitive, represents one view in a broader market. Planby himself acknowledges this complexity by recalling past predictions.

“Yes, [risk] Margins are wide (-50% + 50% in the log), so it's only in the order of direction and size,” explained Planby.

The crypto community is divided as the 2024 Bitcoin halving approaches. While some see the S2F model predictions as optimistic, others caution against relying on just one model. Therefore, whether the S2F model's 2024 and 2028 Bitcoin halving predictions will come true is a speculative but plausible question.