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.