Bitcoin’s Stock-To-Flow (S2F) Model Validated as the Cryptocurrency Becomes Bigger Than Tesla, Walmart, and Berkshire Hathaway

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What a vindication for Bitcoin’s bulls! Despite the greater part of the financial community gleefully pronouncing Bitcoin’s obituary for the umpteenth time in 2022/2023, the world’s pre-eminent cryptocurrency has again roared in defiance, zooming past the $1 trillion valuation for the first time since December 2021.

Source: SoSoValue

Many thought the launch of spot Bitcoin ETFs in the US would mark the top for the crypto sector in general. Those prognostications, however, have proved to be egregiously wrong. As shown in the above snippet, these ETFs have now attracted $3.89 billion in net inflows, providing a robust tailwind to Bitcoin’s latest flight.

This bullish scenario is developing exactly how analysts predicted. After all, the launch of these ETFs has made it extremely convenient for institutional investors, including pension funds, to add diversity to their portfolios by taking some exposure to Bitcoin’s legendary volatility.

What’s more, these ETFs are now buying up around 12.5x more Bitcoin each day than can be produced via mining, leaving no option but for the price to adjust violently upwards.

Bitcoin Crosses $50,000 Price Level to Regain $1 Trillion Market Capitalization

This brings us to the crux of the matter. After a long hiatus, Bitcoin has reclaimed a market capitalization of $1 trillion. This means that the world’s pre-eminent cryptocurrency is now more valuable than Tesla, Walmart, or Warren Buffett’s Berkshire Hathaway.

Bitcoin’s ongoing bullish momentum has also validated the Stock-to-Flow (S2F) model, which posits that the cryptocurrency’s price should increase as its supply via mining rewards shrinks. Bear in mind that the cryptocurrency’s mining rewards are all set to be cut in half in April 2024 in what is known as a halving event, with the ensuing deflationary waves expected to be magnified by the persistent demand from spot Bitcoin ETFs, which are literally scooping up coins from the market and transporting them into cold storage.

Meanwhile, it seems as much of the financial world and mom-and-pop investors were denigrating Bitcoin’s prospects last year, smart investors like Peter Thiel were buying the cryptocurrency hands over fist. Reuters recently reported that Thiel invested $100 million in Bitcoin and another $100 million in Ether “from late summer to early fall last year.”

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