Bitcoin’s (BTC) Stock-to-Flow (S2F) model, a widely cited valuation framework, forecasts a peak price of $222,000 during the current market cycle. However, investors should approach this model with caution, according to André Dragosch, the European head of research at investment firm Bitwise.
Dragosch explained that the Stock-to-Flow model does not account for demand-side factors. Instead, it bases its price modeling on Bitcoin's halving events, which occur every four years and reduce the amount of newly issued BTC by half. He further elaborated:
“Today, institutional demand via Bitcoin exchange-traded products (ETPs) and treasury holdings outweighs the annualized supply reduction from the latest Halving by more than seven times.”
The introduction of exchange-traded funds, ETPs, and other Bitcoin investment vehicles has established a price floor for BTC, supporting prices above the $100,000 level.
Crypto investors and analysts continue to engage in discussions regarding Bitcoin's price trajectory for the current market cycle. They are debating whether BTC has reached its peak or if there is still potential for further growth, especially as the market structure matures with the increasing presence of institutional investors.
Analysts Debate Bitcoin's Potential Price in the Current Market Cycle
Geoff Kendrick, the global head of digital assets research at Standard Chartered, a bank supportive of cryptocurrency, has projected that Bitcoin could reach $200,000 by the end of 2025.
The sharp price decline experienced in October, which saw BTC fall below $104,000, may present a buying opportunity for investors. This could potentially drive BTC to new record highs.
Conversely, other analysts have offered even more optimistic forecasts, predicting a BTC price as high as $500,000 in 2026. This projection is attributed to a significant increase in the M2 money supply, a metric that measures the total amount of U.S. dollars in existence globally.
A rising M2 money supply is viewed as a bullish indicator for Bitcoin, as increased liquidity from the expanded money supply is expected to flow into assets, thereby driving up prices.
However, prominent figures in the crypto industry, such as Tom Lee, CEO of investment research firm FundStrat, and Mike Novogratz, CEO of crypto investment company Galaxy Digital, hold differing opinions.
Novogratz expressed skepticism, suggesting that a $250,000 price target by the end of 2025 is unlikely to be achieved unless "crazy stuff" occurs. Meanwhile, Tom Lee cautioned that a significant 50% drawdown in BTC's price remains a possibility, even with the growing institutional adoption.