Crypto Supporter: Bitcoin’s Stock to Flow (S/F) Ratio Can Move BTC Price to $500,000 by 2021-2022
Volatility in the cryptocurrency market has been increasing for the last few months. The price of Bitcoin (BTC) and other virtual currencies is moving into different directions and traders are taking this into account to trade these market fluctuations. There are some experts in the space that believe that Bitcoin is going to be replacing the financial system rather than falling to zero.
Analysts Believe Bitcoin Could Reach $500,000 By 2021
There are many different price predictions for Bitcoin. Some of them are very conservative, while others are extreme. Crypto Zombie, a crypto enthusiast in the market explains that he believes that Bitcoin could eventually reach $500,000 in the future, specifically between 2021 and 2022.
But how did this user reached that value? Crypto Zombie explained that in order to reach such a value, he took into account stock to flow measures. According to him, the existing stockpile of Bitcoin in 2017 was around 25 times larger than the new coins produced in 2017. Moreover, he believes that by 2022, Bitcoin’s stock to flow ratio could overtake gold in terms of valuation.
At the moment, Gold has the highest stock to flow ratio. In order to reach the current amount of gold, it is necessary to mine gold for a period of over 62 years. For Silver, the stock to flow ratio was 22 years. He has also explained that it was impossible for usual commodities to achieve a higher S/F ratio because as soon as there is market attention they grow. However, prices tend to fall sharply.
Meanwhile, Bitcoin had a stock of 17.5 million BTC and its supply is 0.7 million per day. That means that Bitcoin has a stock to flow ratio equivalent to a 25 S/Fratio.
Crypto Zombie explained that the market capital that the space needs for Bitcoin to reach a market capitalization of a trillion dollar would arrive from Silver and Gold, two of the most popular digital assets in the market.
There are several countries with an interest in Bitcoin and digital currencies. If new retail investors enter the space, with institutions entering as well, it might be possible to see and experience a price increase in the future as well.