Julian Hosp: Bitcoin price in 2020 up to 100,000 USD
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Marcus Misiak –
If you believe Dr. Julian Hosp, could Bitcoin could be in 2020 for up to $ 100,000 in value. This assertion is based Hosp on the Stock-to-Flow (SF)-ratio indicator. This is generally used in the markets for raw materials. Hosp has it applied to Bitcoin.
The SF indicator measures the amount of inventories (Stock) held for assets value with its annual production rate (Flow). Overall, the indicator describes the ratio of how long it would take until the floor has reached the Flow. The indicator is particularly cited often in the case of Gold. The Stock-to-Flow Rate is the ratio between of the world’s annual gold production (flow) to the existing global gold amount (floor).
Gold is so precious because the annual production in proportion to the outstanding amount of Gold is so low. Hosp stated, accordingly, that a higher rate is better because it indicates lower Inflation. As an example, he argued that Gold would need to be supported 62 years to get to the current worldwide amount of Gold. In comparison, silver would need about 22 years.
Bitcoin would currently need about 27 years to reach the circulating supply of 17.7 million (Stock) at a current production rate of 657.000 per year (assuming the production would not be reduced to every 4 years). It is important to know that the Hosp has been calculated by the calculation on the Basis of the current production of 12.5 BTC every ten minutes. After the Halving in the next year to 6.25 BTC, the annual Flow of Bitcoin will be reduced to 328.500 BTC.
Hosp continues and explains that the production is the key factor for determining the value of an asset. On the example of Gold, he notes that in the case of Gold, typically the production will be increased if the miners expect higher profits, which in turn increases the Stock-to-Flow ratio of Gold. Meanwhile, the increase in mine production of Gold in the Phase of over-production, which means that the supply exceeds the demand. As a result, the price of gold drops, making the removal of unattractive, reduces the production rate, and finally drives the Stock-to-Flow ratio upwards.
To said Bitcoin Hosp, however:
Even if the price rises, you can not produce more Bitcoin. It always flows the same amount, because there are all of ten minutes to 12.5 Bitcoins.
Thus, the price is the only factor for the increase in the SF value of Bitcoin. With a view to the future of Bitcoin Hosp explained that with the upcoming Halving in may 2020, the SF-Ratio to 54 will double, what brings you to the Gold, much closer. As such, he predicts that the price of Bitcoin will reach at least $ 100,000:
All of a sudden we have much less production [….], so you have to double the price, in order to keep the ratio stable. But the price is so much lower than Gold, that, when we get closer to Gold, the price should rise to $ 100,000, maybe even $ 300,000.
At present, Hosp, would have to be the BTC price between 8,500 and $ 9,500, if the BTC price follows the SF indicator.
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