PlanB

#238 PlanB - Why Bitcoin’s Stock-To-Flow Model Is Becoming More Accurate Over Time

- PlanB revealed he works at an institutional asset management firm overseeing approximately $100 billion in assets, balancing a personal Bitcoin conviction with professional constraints around regulatory capital requirements and pension fund mandates. - The stock-to-flow model quantifies digital scarcity by comparing the total stock of Bitcoin to annual production, mirroring the ratio used for gold; PlanB derived it after reading Saifedean Ammous's *The Bitcoin Standard*. - Co-integration testing (developed by Engel and Granger, Nobel Prize winners) proves the stock-to-flow model is statistically valid and not spurious—a crucial distinction that strengthens its institutional credibility. - Institutional adoption faces headwinds from regulatory capital charges, central bank skepticism, and pension fund liability structures that don't suit non-yielding assets like Bitcoin. - PlanB argues the efficient market hypothesis is semantics; if even 1% of investors act on public stock-to-flow data, the price reflects it, yet risks like government bans or futures manipulation may still be overpriced into markets. - A major risk to Bitcoin's success remains aggressive U.S. regulation and potential defense of the dollar's reserve currency status; conversely, other nations (India, South Korea, Germany) are becoming more open to crypto.