By Anthony Bertolino

This is the first part of a continuing series where we will present cutting edge educational materials that prove we have recently entered the “Investment Era” for Bitcoin and have left the realm of pure speculation.

Bitcoin is the first scarce digital object the world has ever seen. It is scarce like Silver & Gold, and can be sent over the internet, radio, satellite etc. We can now utilize models to try and track where fair value might be.

Spoiler Alert: Bitcoin looks like it will be going much, much higher in the coming years!

Lesson #1: Stock to Flow

Stock-to-Flow Ratio is defined as existing inventory compared to annual production.  While the economic utility of a consumable good (ex: Oil) is created when it is destroyed or used up, the utility of investment assets like Bitcoin and Gold lies in their possession and later resale.

Stock to Flow

Bitcoin has proven to have the highest Stock to Flow of investable assets which shows increasing scarcity. Dictionaries usually define scarcity as ‘a situation in which something is not easy to find or get’, and ‘a lack of something’.

This scarcity is due to the fact that Bitcoin has unforgettable costliness, because it costs a lot of electricity to produce new Bitcoin.

Based on this new Stock to Flow model, Bitcoin fair valuation is currently around $9,000 and is on track to hit $50,000 next year. If we look further out to 2023, it predicts Bitcoin being valued at more than $100,000 per unit.

Bitcoin Blocks

We are excited to welcome you to the Investment Era of Bitcoin. If you want to learn more, fill out the form below to get your free, no-obligation Bitcoin IRA rollover kit from the nation’s most experienced and proven gold retirement company— the award winning Regal Assets.

 

References:

  1. https://medium.com/@100trillionUSD/modeling-bitcoins-value-with-scarcity-91fa0fc03e25 Plan B, Modeling Bitcoins Value with Scarcity
  2. https://www.getrevue.co/profile/zpx/issues/understanding-bitcoin-s-stock-to-flow-ratio-179035 Understanding Bitcoins Stock to Flow Ratio

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