The S2F mechanism no longer determines BTC dynamics: what market realities say

The paradox of the current Bitcoin cycle is that traditional supply models are no longer working as expected. While the reduction of new issuances during the (halving) was once the main driver of price growth, now demand from large players completely rewrites this equation.

The stock-to-flow model predicts a Bitcoin price surge to the $222 000 mark in this cycle, primarily relying on the mechanics of supply reduction every four years. This theory has long dominated analysis. However, reality shows otherwise: the annual sevenfold reduction in coin issuance is overshadowed by capital inflows through institutional channels.

The European research department of a major investment firm points out a fundamental flaw in how S2F evaluates the market. The model completely ignores the demand side — the role of Bitcoin ETPs, corporate stores of value, and direct investments from funds. This influx exceeds the supply reduction by seven times, turning the classic scarcity-based analysis into an incomplete picture.

Nevertheless, it is this institutional support that keeps Bitcoin above the critical $100 000 mark. Investment instruments and exchange-traded funds have become a kind of safety cushion, ensuring price stability regardless of what S2F predicts.

As the market matures, debates intensify: analysts disagree whether the price has reached its peak or if there is still room for growth. One thing is clear: old models need reevaluation in light of new market conditions.