From a skeptic’s take on Bitcoin’s stock-to-flow ratio to new support for XRP, here’s a look at some of the stories breaking in the world of crypto.
A well-known crypto analyst says a model that’s increasingly used to predict the price of Bitcoin is getting far more attention than it deserves.
According to Alex Krüger, the stock-to-flow ratio, which tracks the circulating supply of an asset against the amount produced per year, is not a reliable tool to determine where BTC is heading in the long run.
“Amazing how so many bring up S2F these days whenever anyone mentions bitcoin supply. I did not have S2F in mind when I wrote this tweet, and no, I don’t think it is very important, it is massively over-hyped.
The Stock to Flow model is to bulls, what the Tether Manipulation paper is to bears. Both based on fancy looking statistical models (more so the latter). Both are flawed. Doubt whoever believes in these extremes will change their minds. The mind believes what it wants to believe.”
According to Krüger, the well-documented fact that Bitcoin’s fixed maximum supply is 21 million coins means that, at the end of the day, demand for the asset is all that matters.
“Bitcoin is a demand-side story. Supply is fully deterministic. There are no supply-side shocks. Fixed total supply and diminishing supply growth are crucial because these drive demand. It is that simple. Demand is what matters most.”
Ripple and XRP
Ternio’s Visa debit card called the BlockCard now supports XRP.