New Study Reveals Bitcoin (BTC) Is Currently ‘MASSIVELY’ Undervalued, Raises Digital Gold Claim
If the latest research data from PlanB is to be believed, Bitcoin is currently “massively undervalued” by analysts all across the globe. In regards to the matter, PlanB also noted that Bitcoin shares quite a few similarities with Gold— but unlike the precious metal, it can be transferred/transported via digital means in a highly secure and decentralized manner.
#bitcoin could be MASSIVELY undervalued
Satoshi: BTC is like a "metal as scarce as gold + can be transported over a communications channel"
Scarce metals (gold, silver, palladium, platinum) can be valued on stock-to-flow ratio. BTC: now 3X undervalued, after 2020halving 10-100X pic.twitter.com/Xx5XbD4pqe
— PlanB (@100trillionUSD) February 3, 2019
When taking into consideration conventionally employed valuation models for scarce metals, PlanB believes that BTC is currently estimated to be near “one-third of its fair value”. These figures when extrapolated to reflect current numbers work out to around the $10K mark.
If that wasn't enough, many experts also believe that following the upcoming 2020 BTC-halving event, the premier crypto asset will become undervalued by a factor of “ten to one hundred times”.
What is Stock-to-Flow Ratio? Why is it so Important?
At this point in the article, it is also worth talking about the concept of stock-to-flow ratio. In its most basic sense, it is the “total amount of a specific commodity that is held in inventories divided by the amount produced annually”. In other words, the ratio can also be thought of as a “measure of abundance” for a specific entity.
At press time, Gold has the highest stock-to-flow ratio of any commodity in the world at 57.
Last but not least, it should be pointed out that PlanB believes that if Bitcoin is able to reach a fair valuation after its next halving cycle, the altcoin could be priced anywhere between $34,000 and $340,000.
Other BTC Price Predictions Worth Noting
- Bobby Lee, the co-founder of BTCC, recently went on record to state that Bitcoin will bottom at $2,500 and only come out of its slump by the end of 2020.
- Independent market researcher Flib Flib also shares Lee’s sentiments and feels that BTC could find a bottom value anywhere between $2,500 and $3,100— following which the currency might scale up to a mammoth price point of $300k+.
On the subject, Bobby Lee went on record to state:
“[The next rally] BTC would peak out in Dec 2021 at $333,000, and then crash back down to $41,000 in Jan 2023. Something like that?”
While PlanB and Flib Flib continue to promote BTC as a financial asset that can be used for facilitating everyday payments, there are people like Max Keiser who are of the belief that the flagship cryptocoin is better suited to be a SoV (Store of Value) than serve as digital money.