Until recently, Bitcoin would often overshoot its intrinsic value to the upside during bull markets and to the downside during bear markets.
While the S2F model has been an effective model in the past, in my view the demand curve will be the dominant driver from here.
For instance, If the demand model says that Bitcoin’s intrinsic value is $50k today and $100k two years from now , then at $30k Bitcoin is going to look a lot better than at $70k.
“As Bitcoin’s value becomes better understood by more and more investors, there could be more efficient accumulation when Bitcoin swoons, and more determined distribution when it moons.
But as investors better understand valuation, Bitcoin is less likely to resemble the early boom-bust days & could start behaving like a traditional risk asset.
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice.