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Hope you all are doing well and good and enjoying the best days of your life. This is me @shahid2030 from Pakistan and you are here reading my post. You all are welcome here from the core of my heart.
This is my participation in a contest Stock to Flow Model organized in SteemitCryptoAcademy by @crypto-academy.
1.- Explain in your own words the Stock to Flow Model, what is its function? |
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The stock to flow model is a very simple way of finding Bitcoin upcoming price. It works on the present data of the commodity verses it's previous years data. The coins already present and the coins that are mining or coming.
Stock to flow is a tool we use for Bitcoin price. We predict the future price using it's previous data. It works on very simple way, it creates a line on the chart above that shows an estimated price level based on the number of bitcoins available in the market relative to the amount being produced (mined) each year.
We know each year new Bitcoins are mined, every second and every minute. If we have more commodity of BTC present in the market it's mean stock is an abundance and if the flow is less it's indicates less BTC are mining this time. If the scenario is like that where stock is high and flow is low, it leads to the scarcity of commodity in the market. Scarcity always means more demand. This help increase the price of the commodity.
In this case if BTC comes up with the such situation, if their is scarcity of the stock in the market, we always see a huge raise in it's value. It's the perfect time for investors to invest here and cash the opportunity.
2.- What would be the advantages and disadvantages of the Stock to Flow Model? |
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The stock to flow model give us a well defined analysis of the commodity, but yeah it has some draw back too. Let's define it's Pros and Cons here one by one.
| Advantages of Stock to Flow Model |
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| It gives us the previous data of BTC through years and in crypto history does matter. We say history repeats itself. |
| It shows us analysis of Commodity present verses new amount coming. If their is scarcity, it always shows the price of Bitcoin will pump. |
| Here it give us a road map for long term investment. It covers the data of previous years. In crypto the most beneficial tade is the one we do for long term. |
| Stock to flow Model is very much easier and simple to use. The data on chat is very simple and clear. |
| Disadvantages of Stock to Flow Model |
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| It shows us previous data, but who knows what happened in past will be repeated again too. |
| Trading on the basis of it alone can highly be risky. It shows us very limited stats and figures, just the current amount of BTC and upcoming or miming BTC's Data is shown. This is insufficient data merely to depend on it. |
| Crypto market is highly volatile, It doesn't have any tactics or solution to overcome it. It's results are always based on the possibilities and perceptions. |
| It doesn't give us a full accurate data. We always see a value gape between what it is showing or it's expected price with that of the real one. Now here is something nine thousand dollars gape between the actual price and the price shown by S2F Model. |
3.- Make an analysis of the Stock to Flow graph |
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I am using here this website, It Link is here. Link.
Let discuss how to use Stock to flow model for Analysis. score on the stock to flow line is the forecasted price for bitcoin at a specific time. The red line gives us the data what is the current price of BTC and what should it be according to the graph. Now the graph here shows us that BTC's price at this current date; 27 January 2024 should be $50,382.
You may find out all the figures and statistics by simply pointing curser of the mouse on that red line or if you are using mobile just tab it with your finger on it. I will show you a complete data.
If the amount of bitcoins to be mined reduces with the time, the stock to flow number (s2f ratio) increases, as we know here the supply in market get decreases. This is now here this model is forecasting that the price of Bitcoin will increase in the future. We can say that their is scarcity in market, that's why it shows us high price than the current one. two thousand dollars gape we can see.
Their is another beautiful usage of stock-to-flow model. It compares Btc with other commodities and precious metals such as gold, silver, or platinum. This process is said to be store of value of commodities. These commodities retains there values for too long period due to their scarcity.
We prefer the Stock to Flow Model for our analysis, because we know that Bitcoin is the first ever made digital coin. It has very limited supply in the market. It takes too much cost and time to mine a small quantity of BTC. That's why we can say that the formula of scarcity can work here on BTC. We can predict it's possible future price.
4.- Can this model be applied to STEEM? Give reasons why this Stock to Flow graph model can or cannot be applied. |
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Using Stock to Flow Model for STEEM is not a wise option at all. This model was first made for BTC sololy. It works best on that commodity well. Now comparing Steem Coin with Bitcoin isn't a wise suggestion at all. BTC mining mechanism is far different than that of STEEM.
BTC has stack of work mechanism, while Steem has a simple reward mechanism. Create content and you will be get paid. Plus it doesn't perform like BTC in the market. BTC is gaining too much value with the passage of time, while Steem has shown us different phases. The price of BTC in 2017 is almost 50x lower than that of now. However BTC is gaining it's value every year and making all time high in each halving events.
BTC has a proper Halving event, where the supply or new mining decreases by 50%. It always leads to it's sacristy in the market, hence it's Price increases. If we look at steem, We don't have any halving or such event for it. Yeah their is burning mechanism inside Steemit we called Burnsteem25, but is far different than that of Halving.
It's too much easy to find out BTC scarcity or overloading in the market, but finding it for a coin like Steem is something difficult. The stats and figures will always change with change in time.
So overall I want to say we shouldn't use it for STEEM or other small crypto currencies like that. If still use we should must watch other indicators and current scenario of the market.
This is all about my blog for today, hope you guys have enjoyed reading it. See you soon with a new amazing and interesting topic, till take care.
| I would like to invite: @goodybest, @ripon0630 @emsonic, @miyexi, @kouba01, @mile16, @pelon53 @solaymann @waterjoe , @willmer1988, @msharif to participate in this Contest |
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Your presence here means alot
Thanks for being here
Regard shahid2030
Thanks for sharing dear friend thanks for sharing such quality article on steemit, you have been good and consistent at this and hopefully you get your reward someday soon.
Thanks for sharing such quality post, wishing you success please engage on my entry https://steemit.com/hive-108451/@starrchris/eng-esp-steemit-crypto-academy-contest-s15w2-stock-to-flow-model-or-or-modelo-stock-to-flow
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Thank you so much dear for your precious comment here. Keep blessing my dear friend friend.
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Thank you, friend!
I'm @steem.history, who is steem witness.
Thank you for witnessvoting for me.
please click it!
(Go to https://steemit.com/~witnesses and type fbslo at the bottom of the page)
The weight is reduced because of the lack of Voting Power. If you vote for me as a witness, you can get my little vote.
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Please do not use the hashtag #burnsteem25 as long as you do not meet the initiative’s conditions.
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Sorry, I think I forgot, else I sit it into every post of mine.
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Greetings, my friend @shahid2030! 🌟 Your Stock to Flow Model explanation is impressive—it simplifies Bitcoin predictions. Yet, applying it to STEEM might be like comparing apples to oranges. All the best in the contest, success for you! 👍
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Thank you so much dear friend for your kind and precious response, keep blessing.
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The way you explain this S2F Model is really interesting.
Definitely in crypto market, demand results in scarcity when flow is less and definitely mean a bullish in market prices.
While Supply that shows high percent availability of a commodity definitely means bearish.
It's advantages are super and premium but disadvantages are to be considered well during analysis to get best results.
Your perspective in applying the model to steem is highly rated to me.. this two behave differently in market and got different mechanism, so if to be apply to steem then the concept must be deepen than this.
Good luck sir
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Thank you so much for your beautiful comment dear. Keep blessing.
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Greetings my dear friend you always right and the post so well presentable and validtailed whenever I saw your post you have wrote the questions in so much detail and you try to explain every aspect of the question and the most important thing is the markdown style you have used is just outstanding and how will you have question the last answer that this cannot be emplifier over here you are absolutely right some of my friends were saying we can implement on steem but I think that's not voice and if we see the rate and production of both the coins so this is not a good option
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Thank you so much dear for the beautiful comment. Keep blessing friend.
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Your welcome 🤗🤗
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My Twitter link.
https://twitter.com/Shahid00116/status/1751292213781254603?s=19
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El modelo S2F fue creado para medir la escasez del oro o la plata, un comportamiento similar de escasez como el BTC ha hecho posible aplicarlo por sus características de stock cuantificable y flujo constante.
El modelo ha demostrado ser exitoso en el pronóstico de su precio futuro basando su modelo en la escasez como su piedra fundamental. La evaluación de la escasez como la tasa entre el Stock y el flujo es similar a la del oro, por lo que se considera una reserva de valor alternativo pues cuenta con un gran capital con dominio del casi el 49,75%.
El halving programado en BTC hace que el modelo sea viable ya que cada 4 años se reduce a la mitad la recompensa induciendo la disminución de la oferta y la escasez cuando la demanda es constante.
Gracias por compartir ¡Saludos y éxitos!
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Yes dear this model was made for big commodities like BTC, gold and silver. Thank you so much for your time and leaving a beautiful comment under my post. Keep blessing dear.
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@shahid2030
If we talk about stock to flow model, it was developed in 2019 by a person who is not known till now but he is anonymous and it was developed for Plan B without knowing anything. For example, as we talk about coins like gold, silver and bitcoin, it has proven to be very effective and efficient to know about its production capacity and its current stock, and if you talk about All his prophecies have been clearly proved to be correct and all the help he has received has been a success. It works for current stock and incoming stock. We can check it clearly. We can see from its lines that it shows its current price. The higher the value the higher the value will be as we know the bitcoin halving in mid-April means it's going to be halved and the more it's going to increase in value and it's really created a really great tool. Gaya in which people are getting benefits in different ways.Others your post is appreciable doing great work and wish you success and win the competition.
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Thank you so much for a nice comment dear. Keep blessing friend.
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Bhai aapane is topic ko bahut acchi Tarah se cover kiya hai aur aapane bilkul theek kaha hai ki long term investment ke liye yah model ko follow karna ek acchi baat hai jo ki iska advantage bhi hai lekin agar Ham iske disadvantage ki baat karen to ismein ek chij bahut common hai ki sare factors ko prediction karne ke liye include nahin karta Lekin overall apny acha explain Kiya hai...
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Yes dear this works for long term. We should work on long term. Thank you so much for your time. Keep blessing.
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TEAM 4
Congratulations! This post has been voted through steemcurator07. We support quality posts and comments!Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
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Thank you so much dear for the support. Keep blessing.
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