Is Bitcoin (BTC) Currently Undervalued? Institutions, Halving, Payments, Custody and More in 2019
- Bitcoin is currently trading above $8,800 with a market cap of just above $150 billion
- By stock to flow model, after 2024 Bitcoin halving, total market value will reach $30 trillion
Currently, BTC/USD is trading at $8,825, having surged more than 180 percent from the yearly low of $3,150 during the brutal winter of 2018. However, we are still down 57 percent from its all-time high of $20,000.
According to the Stock-to-Flow model analyzed by analyst planB for Bitcoin, the first scarce digital object like silver and gold that can be even sent over the radio, internet, and satellite, falls above $100 billion. Currently, Bitcoin market capitalization holds at $153 billion.
— PlanB (@100trillionUSD) June 12, 2019
Scarcity is basically a situation in which something is not easy to get and in case of Bitcoin, it is the ‘unforgeable costliness' as stated by Nick Szabo,
“Precious metals and collectibles have an unforgettable scarcity due to the costliness of their creation. This once provided money the value of which was largely independent of any trusted third party. [..][but] you can’t pay online with metal. Thus, it would be very nice if there were a protocol whereby unforgettably costly bits could be created online with minimal dependence on trusted third parties, and then securely stored, transferred, and assayed with similar minimal trust. Bit gold,” explained Szabo.
When it comes to gold and bitcoin, they are different from consumable commodities because they have a high stock-to-flow ratio that makes it the commodity with the lowest price elasticity.
“The existing stockpiles of Bitcoin in 2017 were around 25 times larger than the new coins produced in 2017. This is still less than half of the ratio for gold, but around the year 2022, Bitcoin's stock-to-flow ratio will overtake that of gold,” stated Saifedean Ammous.
WOW.. 99.5% R2: Stock-to-Flow drives Market Value!
Silver,Palladium,Platinum have lower stock than Gold, but that doesn't mean they are scarcer and more valuable
— PlanB (@100trillionUSD) June 13, 2019
Bitcoin’s current SF is 25 that puts it in the category of silver and gold which will jump and get doubled to 50, very close to gold’s SF 62 after the 2020 Bitcoin reward halving.
According to the latest update by planB, per Stock-flow line and S2F growth path, after 2024 halving, Bitcoin’s total market value will surge to $30 trillion.
— PlanB (@100trillionUSD) June 15, 2019
Recently, the analyst has also shared how Bitcoin production is going towards zero. Practically, after three more halvings, the last one in 2028, Bitcoin market value could be as high as $100 trillion, resulting in hyperbitcoinization.
As for where all this money will come from? In his detailed analysis from late March, planB shared that silver, gold, countries with negative rate such as Japan, Europe, “US soon” and countries with predatory governments like China, Turkey, Iran, and Venezuela along with billionaires and millionaires hedging against QE and institutional investors discovery best performing assets of the last 10 years will bring in these trillion dollars into Bitcoin.
Bitcoin’s price is $49,251.67 BTC/USD exchange rate today. The real-time BTC market cap of $920.46 Billion currently ranks #1 with a chart dominance at 62.37%, daily trading volume of $38.17 Billion and live coin value change of BTC -9.59 in the last 24 hours.