From the potential impact of Bitcoin’s increasingly limited supply to an update on Ethereum 2.0, here’s a look at some of the stories breaking in the world of crypto.
Crypto analyst and author of Cryptocurrencies Simply Explained, Julian Hosp, says a metric known as the stock-to-flow ratio indicates Bitcoin is on a trajectory to $1 million over the next 10 years.
The ratio calculates the current supply of a given commodity divided by the amount produced per year in order to predict future value. When using the ratio to determine where Bitcoin may be heading, the leading cryptocurrency’s limited supply of 21 million coins emerges as a key factor. In the short term, Hosp says the model shows that Bitcoin’s upcoming halving, which will cut the block reward given to miners in half in 2020, should boost the price of BTC from $100,000 to as high as $300,000.
“Suddenly, we will have way less production… So by halving this, in order to keep the ratio stable, just from that the price [of Bitcoin] needs to double. But we are so much lower right now in the stock-to-flow ratio compared to gold, that if we get closer and closer to [gold’s ratio], the price should actually go to a $100,000 – maybe even $300,000. And then we would have a setback similar to how we always have these setbacks, to around $40,000.
As Bitcoin’s supply continues to dwindle over the next 10 years, Hosp says the price of 1 BTC is projected to climb to $1 million.
“You can see this in the entire calculation going up here. What we always have with this halving, we always have this move up… Obviously over time, we would get to a million here.