Here’s Why Bitcoin Will Lag its S2F Valuation By 5-10 Years, According to Willy Woo

Bitcoin analyst Willy Woo believes it may take up to a decade before bitcoin (BTC) can achieve the valuation predicted by the stock-to-flow (S2F) model.

According to a tweet by Woo, the macroeconomic conditions required to propel BTC to S2F’s valuation would take a long time as “the world simply doesn’t move quickly.”

Bitcoin to Delay S2F Valuation

The analyst’s prediction comes after the Bitcoin network underwent a fourth halving, which reduced its inflation rate by slashing the number of coins produced daily by 50%.

Since BTC’s inflation rate has dropped below that of gold, considered its traditional finance rival, Woo said it would be interesting to see if the cryptocurrency’s market cap would exceed that of the precious metal, per the S2F model’s theory.

It may take time for necessary conditions like adequate custody infrastructure, clear regulations, adequate trading instruments, and asset manager acceptance for Bitcoin to come into place. Hence, Woo believes BTC would lag its S2F valuation by five to ten years.

S2F’s Bitcoin Prediction

PlanB, the creator of the S2F model, has remained adamant in his stance that BTC would outperform gold eventually, especially with the crypto asset’s inflation rate declining after the halving.

With an S2F ratio of 112 post-halving, PlanB believes BTC will take out gold, whose ratio still hovers around 60. The ratio is calculated by dividing the circulating supply of a commodity by its annual production to derive a scarcity gauge. Notably, crypto exchange Bybit reported last week that BTC would become twice as rare as gold after the halving, making the cryptocurrency more valuable than the precious metal.

PlanB has predicted that BTC will soar to $100,000 by year-end and $300,000 by the end of 2025, although the latter price is at the low end of the $250,000 to $1,000,000 range. This indicates that the S2F creator thinks BTC could go higher during this bull cycle.

Bitcoin vs. Gold and Stocks

Meanwhile, Woo’s opinion drew backlash from the gold community. In response, the analyst shared data revealing bitcoin’s annualized returns over four years compared to gold and stocks.

According to the chart, BTC has seen returns of 76%, while gold and the S&P 500 stock index have seen four-year gains of 8.6% and 17%, respectively.