If you’re getting fed up with all the forecasts of the bitcoin price, well, get used to it, because I’m planning to write a couple more before we go into 2020.
The digital asset has experienced a halving event every four years since the development of Bitcoin (BTC) in 2009, reducing the number of coins continuously entering the economy by half, rendering it a deflationary asset.
Based on its hard-coded scarcity, Bitcoin has risen dramatically in value over the years, giving the commodity a high stock-to-flow ratio. Historically, Bitcoin has measured band rates below its median before half years while graphically illustrated with variance bands.
PlanB’s proposed stock-to-flow (SF) formula has become widely accepted as an accurate model for forecasting Bitcoin’s price given the strong correlation that continues to this day. We have discussed this model many times before
The stock-to-flow method, using gold as an example, discusses the shortage of the metal as it aligns with its production and the amount of new gold made available annually, the article noted.
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