German bank BayernLB predicts Bitcoin to jump to $90.000 in 2020

The German state-owned bank BayernLB published in a recent report a price forecast of $90.000 for Bitcoin in May 2020.

The author of the report uses the stock-to-flow ratio to analyse the evolution of the commodities prices and extrapolated it to forecast the price of Bitcoin.

The stock-to-flow ratio is the total amount of existing assets of a certain class divided by the amount produced annually. It quantifies the hardness of an asset and ” Applied to Bitcoin, an unusually strong correlation emerges between the market value of this cryptocurrency and the ratio between existing stockpiles of Bitcoin (“stock”) and new supply (“flow”) – cites the report.

A big challenge for this model are the next Bitcoin halvings (50% reduction in supply growth) in May 2020 and in 2024.

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