The volatility present in the cryptocurrency market speaks for it itself as the prices undergo massive changes in a span of few days or even hours weeks. Bitcoin, the superior representative of the cryptocurrency ecosystem, has often been lauded as a solution to various financial problems and criticized for not having any “substantial value”.
Analysts and crypto-enthusiasts have speculated the future of Bitcoin [BTC] and many of them had made keen predictions on the coin’s future.
Crypto Zombie referred to a research report in medium and explained that the existing stockpile of Bitcoin in 2017 was around 25 times larger than the new coins produced in 2017.
He believed that by 2022, Bitcoins stock to flow ratio might overtake Gold in terms of valuation.
According to the report, Gold had the highest stock to flow ratio of 62 years. For silver, it was around 22 years and the high assets make them monetary goods. He mentioned that it was impossible for usual commodities to achieve a higher S/F ratio because as soon they grab market attention, the prices surge, production rises and then prices plummet again.
In the same situation, at press time, Bitcoin [BTC] had a stock of 17.5 million coins and a supply of 0.7 million per year, which is equivalent to a 25 S/F ratio.
He added that the market capital needed for achieving one trillion dollar Bitcoin market cap would arrive from Silver and Gold commodities. The countries with negative interest rates, like Europe, Japan, would also play a role in hiking the valuation, he added.
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