Analyst PlanB releases the latest Bitcoin valuation model, with the calculated result reaching $288,000.

The anonymous analyst PlanB, who was the first to quantify the value of Bitcoin (BTC) using the Stock-to-Flow (S2F) model, released an optimized version of the valuation model on April 28. The new model introduces a "phase change" factor into the existing Stock-to-Flow ratio, offering a new perspective for predicting the price of Bitcoin.

Stock-to-Flow Model

Anonymous analyst PlanB discussed the design concept of a new model in his latest article, which is based on the existing stock-to-flow model. The stock-to-flow model is a valuation model that estimates future prices through quantifying scarcity. Generally, the higher the stock-to-flow ratio, the higher the valuation of the asset. According to the model's estimation, after the Bitcoin block reward halving in May 2020, its market value is projected to reach $1 trillion, indicating a Bitcoin price of $55,000.

Phases of Asset Transformation

However, PlanB elaborated on a new concept in his latest article, claiming that over a decade of development, although Bitcoin has always been Bitcoin, there have been phase changes in the use cases of Bitcoin or how the public perceives Bitcoin. Using the example of the U.S. dollar, PlanB explained the concept of asset phase changes:

"Phase changes also exist in the financial markets. For example, the U.S. dollar transitioned from being backed by silver (1 dollar = 371.25 grains of pure silver = 24 grains of gold) to gold-backed paper notes, and eventually to unbacked paper notes (meaning paper notes backed by debt). Although we always refer to the U.S. dollar as the dollar, the dollar has completely different meanings in these phases."

Therefore, PlanB divides Bitcoin into the following four phases (clusters):

1. Proof of Concept (after the Bitcoin whitepaper)

2. Payment Tool (equivalent to the U.S. dollar, 1 BTC = $1)

3. Digital Gold (after the first halving, nearly equivalent to gold, 1 BTC = 1 ounce of gold)

4. Financial Asset (milestones include daily trading volume reaching $1 billion, legal clarity in Japan and Australia, and the launch of regulated futures markets by CME and Bakkt)

Although Bitcoin remains Bitcoin, Bitcoin in each phase has completely different asset attributes. It can be seen from existing valuation models that Bitcoin is roughly divided into four clusters, which seems consistent with the halving and phase change theories of Bitcoin.

Stock-to-Flow Cross-Asset Model (S2FX)

Following this concept, PlanB optimized the existing model and developed the Stock-to-Flow Cross-Asset Model (S2FX). This new model not only applies to Bitcoin but can also be used to estimate the prices of gold and silver, hence the term cross-asset model. After conducting linear regression on the data of the new model, PlanB found a more significant relationship between the model and market value compared to the old model (old: 95% R2, new: 99.7% R2).

Based on the new valuation model, the projected value of Bitcoin by the end of 2024 is approximately $288,000, which is about 5.23 times the original valuation. However, PlanB emphasized at the end of the article that the new model is currently in its initial version and requires peer review.

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