Bitcoin Stock-To-Flow (S2F) Model Hints a $500,000 Average Price Target

Bitcoin (BTC), the largest cryptocurrency by market cap, saw a major rebound after Donald Trump won the United States election.

In hours, the coin reclaimed and overshot its All-Time High (ATH) of $73,750. Bitcoin jumped to more than $77,252, but the price level has seen some fluctuations since then.

Bitcoin and the Current Ecosystem Outlook

Bitcoin’s price is now $76,413.90, corresponding to a 0.35% surge in 24 hours. The sudden recovery has raised the optimism of several traders and investors.

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More than ever, they are confident in the coin’s capacity to pull in more gains. Based on a prediction provided via the Stock-to-flow (S2F) model, Bitcoin price could reach an average of $500,000 in the next four years.

PlanB, the creator of the S2F model, made this prediction based on the model’s historical data and pattern. He highlighted Trump’s proposal to create a national BTC reserve, citing this as a potential driver for demand.

He believes it could add “200,000 BTCs per year” to the buying pressure at this level. “If history is any guide, if the stock-to-flow model is any guide, then we’ll see sharp price increases from here,” the analyst said.

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The Stock-To-Flow model assesses Bitcoin’s value largely based on its limited supply and scheduled halvings. This usually suggests substantial price growth after each halving event.

Apart from the $500,000 lofty target for Bitcoin, he noted a possible wide variance between $250,000 and $1,000,000 per BTC.

Donald Trump to Work on US Government Bitcoin Reserve

Meanwhile, the incoming Donald Trump administration is expected to bring the necessary push that the crypto industry looks forward to.

Bitcoin ETF products have done much to redirect institutional investors’ attention to the crypto sector. However, several entities expect increased institutional growth due to the change in the landscape.

Before the election, Senator Cynthia Lummis pushed to create a Bitcoin reserve similar to gold. With the election of a pro-crypto leader in the United States, Americans are optimistic about seeing the changes that might come with the crypto ecosystem.

This new administration could issue an Executive Order to allocate federal funds for BTC acquisition, potentially establishing a new reserve standard.

Future Valuation Outlook

CryptoQuant analysts believe BTC has a possible breakout potential, as in previous cycles. Hence, traders may just be lucky to see another significant upward trend.

The coin is repeating a pattern similar to the bullish cycle events of 2017. For context, that move marked a pivotal phase in Bitcoin’s market cycle.

Bitcoin Realized Cap increased by 3.8% over the past month. It reached an all-time high of $656 Billion, indicating substantial capital inflows totaling $2.5 billion.

This significant rise reflects a robust accumulation trend, similar to the level of activity last seen in January 2023.

Additionally, the surge in this metric suggests that Bitcoin’s market valuation, based on the price at which each coin has recently moved, has markedly expanded.