Stock-to-Flow: The $100K Model That Broke

The model predicted $100K Bitcoin by 2021. Bitcoin hit $15K instead. It eventually hit $100K in 2024 - four years late.

Stock-to-Flow model

The Stock-to-Flow (S2F) model was created by an anonymous analyst called PlanB. The thesis was elegant: Bitcoin's value could be predicted by its scarcity ratio - existing supply divided by new annual production. After each halving, production drops, scarcity increases, and price rises mechanically. It was physics applied to money. Or so PlanB claimed.

The model generated a price chart that showed Bitcoin reaching $100,000 by December 2021. Some versions predicted $288,000. The chart was shared millions of times on Crypto Twitter. It became the foundational tool for Bitcoin price prediction. Fund managers cited it. YouTubers screenshotted it. "The model says $100K" was treated as near-certainty by people who had never read a statistics textbook.

For a while, Bitcoin's price tracked the model almost perfectly. This confirmation bias convinced millions that the model was predictive rather than coincidental. Hindsight fitting looks like prophecy until it doesn't.

Bitcoin peaked at $69,000 in November 2021. Close to six figures, but the model required $100K by year-end. It missed. Then Bitcoin crashed to $15,500 in 2022 - more than 80% below the model's prediction. The model didn't just miss the target. It was off by an order of magnitude in the wrong direction.

PlanB argued the model was still valid on longer timeframes. Critics pointed out that S2F conflated scarcity with demand. Gold is scarce too, but its price doesn't mechanically follow production rates. The model also ignored that crypto's market dynamics are driven by leverage, sentiment, narratives, and fraud - not just supply mechanics.

Bitcoin eventually did hit $100,000 in late 2024, roughly four years after the model predicted. But a model that is off by four years is not a model. It is a vibe. A broken clock is right twice a day. S2F was right once per cycle, and only if you squinted and adjusted your timeframe after the fact.

PlanB still posts on X. The model is no longer taken seriously by institutional analysts. But it taught crypto an important lesson: a model that fits past data perfectly can still fail spectacularly at prediction. Overfitting is not insight.