Key Points
Bitcoin Stock-to-Flow model projections are back in the spotlight after a fresh call for a potential $222,000 peak this market cycle. Yet several market veterans say traders should be careful about leaning too hard on the framework. The debate now hinges on a key shift: institutional demand from exchange-traded products and corporate treasuries may be overpowering supply effects from halvings, a core pillar of the model.
Investment firm Bitwise’s European head of research André Dragosch warned that the Bitcoin Stock-to-Flow model focuses on supply while ignoring demand dynamics that increasingly set the tone. In his view, today’s flows into listed funds and balance-sheet holdings are the swing factor for price, not just the reduced issuance after the latest halving.
“Today, institutional demand via Bitcoin exchange-traded products (ETPs) and treasury holdings outweighs the annualized supply reduction from the latest Halving by more than seven times,” Dragosch said.
As the cycle matures, the presence of institutional buyers has created what some describe as a price floor, helping keep spot levels supported above the $100,000 mark even after an October flash crash briefly sent BTC below $104,000. The tug-of-war between the Bitcoin Stock-to-Flow model’s supply math and real-world demand has set up a nuanced outlook into 2025.
What the model says—and why the Bitcoin Stock-to-Flow model divides opinion
Created to frame scarcity, the Bitcoin Stock-to-Flow model estimates price based on the ratio of existing BTC (stock) to new issuance (flow). Each halving cuts new supply by 50%, raising the ratio and, by the model’s logic, boosting price over time. Its appeal is its simplicity. Its Achilles’ heel is the exclusion of demand.
- Why fans like it:
- It captures Bitcoin’s programmatic scarcity.
- It offers a structured, cycle-based view that aligns with past supply shocks.
- Why critics push back:
- Markets are forward-looking; halvings are known in advance.
- Demand, liquidity and macro conditions can overshadow supply changes.
- Model fits can be sensitive to time windows and may overstate precision.
Dragosch’s critique lands squarely on the demand side. If ETF flows, corporate treasuries and global liquidity now dwarf new issuance, the Bitcoin Stock-to-Flow model’s explanatory power could be fading. That doesn’t make the framework useless, but it suggests investors should pair it with demand metrics and macro signals.
Institutional demand meets the Bitcoin Stock-to-Flow model
ETF and ETP access has transformed market microstructure. Spot funds, structured notes and other vehicles channel retirement and wealth assets into BTC on a daily basis. These flows can overwhelm the reduced issuance from the latest halving, particularly when market sentiment turns risk-on.
Key dynamics today:
- ETF and ETP demand can exceed new supply by a wide margin in risk-on phases.
- Corporate treasury allocations, while episodic, remove coins from liquid float.
- Liquidity cycles, M2 trends and real yields influence allocation decisions.
- Exchange liquidity and market depth matter for how price responds to flows.
In this context, the Bitcoin Stock-to-Flow model is best used as a scarcity baseline. The price path depends on whether demand persists, accelerates or pauses—something the original equation does not capture.
Forecasts collide: beyond the Bitcoin Stock-to-Flow model
Analysts are split on how high BTC can run in this cycle, and how quickly.
- Standard Chartered’s Geoff Kendrick sees room for Bitcoin to reach $200,000 by the end of 2025, citing maturing market structure and institutional participation.
- Other strategists float upside as high as $500,000 in 2026 on the back of a surging global M2 money supply, which can funnel liquidity into risk assets.
- Skeptics counter that a straight-line move is unlikely. Galaxy Digital’s Mike Novogratz said a $250,000 print by end-2025 is improbable “unless crazy stuff happens.”
- FundStrat’s Tom Lee has warned that a 50% drawdown is still possible despite institutional adoption, a reminder that crypto remains volatile even as it gains mainstream traction.
The common thread: even optimistic calls increasingly acknowledge that demand, policy and liquidity—rather than the Bitcoin Stock-to-Flow model alone—will determine the ultimate peak.
Halving math vs real-world flows: what matters more now
Halvings are predictable. Demand is not. That swing factor explains why the same supply setup can yield different outcomes across cycles.
What’s anchoring prices today:
- ETF/ETP inflows that some say create a soft floor above $100,000
- Treasury and corporate allocations that reduce circulating supply
- A broad investor base that includes pensions, wealth platforms and RIAs
What can unlock upside or trigger setbacks:
- Macro liquidity shifts tied to money supply growth and real rates
- Regulatory clarity that broadens or restricts distribution channels
- Large redemptions or flow pauses in listed products
- Risk events that push volatility higher and leverage lower
The Bitcoin Stock-to-Flow model helps frame scarcity, but it’s the tug-of-war between flows and macro that often decides near-term price.
How to track demand alongside the Bitcoin Stock-to-Flow model
Because the Bitcoin Stock-to-Flow model does not include demand, traders often add a dashboard of leading indicators:
- ETF and ETP net flows by day and week
- Exchange balances and whale wallet accumulation
- Real yield trends, dollar index and global liquidity proxies
- Funding rates, term basis and options skew for positioning clues
- On-chain velocity, active addresses and realized cap metrics
A multi-factor view reduces reliance on any single model and can flag when fundamentals diverge from scarcity-based expectations.
What the pros are saying about the Bitcoin Stock-to-Flow model
- André Dragosch, Bitwise: “Institutional demand via ETPs and treasuries outweighs the annualized supply reduction by more than seven times.” His takeaway: treat halvings as one input, not destiny.
- Geoff Kendrick, Standard Chartered: Price could still reach $200,000 by late 2025 if institutional adoption broadens and liquidity stays supportive.
- Mike Novogratz, Galaxy Digital: $250,000 by end-2025 looks unlikely without extreme catalysts, underscoring the path dependency on flows and macro.
- Tom Lee, FundStrat: Even in an institutional era, BTC can suffer a 50% drawdown, a caution against overconfidence.
These views converge on a pragmatic message: the Bitcoin Stock-to-Flow model is informative about scarcity, but the market’s center of gravity has shifted toward demand.
The October shakeout: from flash crash to “buy the dip” debate
October’s swift drop below $104,000 revived an old question: was it a reset or a warning? Bulls saw it as a liquidity pocket that allowed longer-term buyers to add exposure. Bears viewed it as a sign that leverage and positioning remain stretched.
What followed:
- Quick stabilization above six figures as ETF demand reasserted itself
- A renewed focus on whether the $100,000 area represents durable support
- More selective risk-taking across smaller tokens as BTC dominance held firm
The episode highlights a key point for this cycle: volatility has not vanished; it has been reframed by deeper liquidity pools and institutional distribution.
Macro watch: money supply, real yields and policy paths
Some forecasts tying 2026 targets to a jump in global M2 reflect a broader macro lens. Higher money supply can be bullish for scarce assets if real yields remain contained and risk appetite improves. Conversely, a persistent rise in real rates and a stronger dollar can sap demand even when issuance is limited.
Signals to monitor:
- Global M2 growth and credit impulse
- Real 10-year yields and breakeven inflation expectations
- Dollar trends and cross-asset liquidity measures
- Regulatory developments that affect product access and custody
Layering these inputs on top of the Bitcoin Stock-to-Flow model can help explain why similar halving setups produce different price arcs.
Risks to the outlook that the Bitcoin Stock-to-Flow model cannot capture
- Flow reversals: A pause or reversal in ETF and ETP net inflows can test supposed floors.
- Regulatory shocks: Policy setbacks can disrupt distribution or custody arrangements.
- Macro volatility: A growth scare or rapid tightening in financial conditions can force deleveraging.
- Market structure: Liquidity pockets, basis dislocations and option dealer positioning can amplify moves.
These are precisely the factors the Bitcoin Stock-to-Flow model omits, which is why many strategists present it as a reference point rather than a price target machine.
What to watch next
- ETF and ETP flow trends across U.S. and European listings
- Treasury disclosures on corporate BTC holdings and new adopters
- Options expiries and basis signals around key macro dates
- On-chain data for signs of long-term holder distribution or accumulation
- Macro catalysts including central bank decisions, liquidity trends and fiscal updates
Each of these inputs can validate or contradict scarcity-based expectations, helping investors calibrate risk.
Conclusion: keep the Bitcoin Stock-to-Flow model, widen the lens
The Bitcoin Stock-to-Flow model remains a popular way to visualize scarcity and frame the cycle. Its headline—this time pointing to a potential $222,000 peak—adds to the narrative but should not dominate it. In a market increasingly shaped by ETFs, treasuries and macro liquidity, demand now does the heavy lifting.
A balanced approach pairs the Bitcoin Stock-to-Flow model with real-time flow data, policy watchpoints and risk management. That blend respects Bitcoin’s engineered scarcity while acknowledging the institutional era’s defining feature: price is set at the intersection of supply, liquidity and conviction, not by halving math alone.
This article is for information purposes only and is not investment advice.
FAQ’s
What is the Bitcoin Stock-to-Flow model, and does it still work in today’s market?
The Bitcoin Stock-to-Flow model links price to scarcity by comparing existing BTC (stock) to new issuance (flow) after halvings. It ignores demand. Bitwise’s André Dragosch notes institutional demand via ETFs/ETPs and treasury holdings now outweighs the latest halving’s annualized supply reduction by more than seven times, so use the model as a reference, not a standalone forecast.
What should I track beyond the Bitcoin Stock-to-Flow model to gauge BTC’s direction?
ETF/ETP net flows and AUM trends
Exchange reserves, whale accumulation and on-chain activity
Real yields, dollar strength and global liquidity (M2)
Derivatives signals: funding rates, basis and options skew
Corporate treasury disclosures and regulatory developments
Article Source: Trading View
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