Why the Stock-to-Flow Bitcoin Valuation Model Is Wrong
PlanB then plots bitcoin’s SF against USD market capitalization as well as two arbitrarily chosen SF data points for gold and silver. PlanB then runs a linear regression using the natural logarithm of bitcoin’s SF metric as the independent variable and the USD market capitalization as the dependent variable.
From a theoretical point of view, the model is based on the rather strong assertion that the USD market capitalization of a monetary good (e.g. gold and silver) is derived directly from their rate of new supply. Many cryptocurrencies which utilize Bitcoin’s code have the exact same supply schedule as Bitcoin and everyone understands their SF values have nothing to do with their future (or current) valuation.