Bayern LB: the Bitcoin price will rise to 90,000 USD

One of the biggest German banks, has released yesterday a massive Bitcoin price forecast. According to BayernLB, a key indicator shows that BTC is on the way, after the next Halving to 90,000 US to rise dollars.

The forecast is based on the Stock-to-Flow Rate of Bitcoin, which is frequently used to the future price of precious metals such as Gold to predict. The current offer is divided by the quantity produced. The authors of the report also provide comparisons between the Stock-to-Flow ratio of Gold and Bitcoin. While you claim that Gold deserves a high Stock-to-Flow ratio for millennia, has been Bitcoin’s coded so that it represents from the start a “hard Form” of money. This leads to the fact that the Stock-to-Flow-increasing ratio faster than any other commodity ever:

Sure is that the Stock-to-Flow ratio of Bitcoin in may 2020 – will increase after the next Halving – dramatically-from approximately 25.8 to almost 53. In contrast, the Stock-to-Flow Rate of Gold (currently in the vicinity of 58) will be next may, and only slightly (if at all) higher. […] Taking into account the Stock-to-Flow ratio of Bitcoin from may 2020, there is a dizzying price of around 90,000 US dollars. This would mean that the upcoming halving effect is hardly in the current Bitcoin price of about USD 8,000 (the current model value is approximately USD 7,500) was priced in.

Furthermore, the authors note that a high Stock-to-Flow-ratio for a monetary commodity is desirable. You even go so far as to say that the hardness of Bitcoin might make asset its introduction is inevitable. In the next year, Bitcoin will already have a similarly high degree of hardness, such as Gold. In the year 2024, when the Halving will take place, will increase the degree of hardness of the Bitcoin massively.

In the report it is stated that it is actually the lack of industrial applications is the Gold of power to a suitable Form of money. Precious metals, which are mainly used in the industry, such as, for example, Palladium, tend to have a low-fuel-flow ratio. Even if these assets have stocks, very low stock, makes its production in relation to do this to a poor form of money because of the stock of the metal lann can be easily “diluted” if the price suddenly increases.

Interestingly, the researchers of the Bank noted that Bitcoin has only a few uses except as a monetary asset. This is according to BayernLB, but an advantage and not a disadvantage. It is the Stock-to-Flow-model-a positive influence, as there is on the demand side, no sudden monetary driver. This leads to a System in which there is “no demand-side developments”, which distort the price formation.

The report warns, however, that Bitcoin is still in an early stage and the market is extremely risky. In addition, the authors also find that the Stock-to-Flow ratio in the long run can be a lousy indicator:

As an analyst, you know only too well that even the best statistical model may fail miserably when trying to predict the future. […] Only one thing is clear: If Bitcoin really the money of the 21st century. Century is supposed to be, then, therefore, because of its properties (especially its high hardness degree) have been preferred to alternative funds – after all, Bitcoin is a fully open, purely voluntary money system.

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