Top German Bank Predicts Bitcoin to Hit $90,000 After Halving, Calling It ‘Ultrahard Money’

Bayern LB, one of Germany’s top banks, has published a report in strong support of bitcoin superseding gold, predicting a price of $90,000 per BTC post bitcoin’s halving in 2020.

Within a report entitled, “Is bitcoin outshining gold?” the bank’s researchers delved into the stock-to-flow ratios of gold and bitcoin, specifically regarding the impact of reduced supply on asset value.

The Stock-to-Flow Model

A stock-to-flow (SF) ratio is an analytical method commonly used within commodities, such as gold and silver, to ascertain the scarcity – or as the researchers put it the “hardness” –  of an asset based on its circulating supply (stock) and annual production (flow). Essentially, the higher the SF of an asset, the more valuable it is deemed. The report remarks that when this analysis is applied to bitcoin, a “strong correlation” emerges between the market price and its SF.

This reaffirms the analyses of various crypto proponents, including Saifedean Ammous, the author of the seminal Bitcoin Standard, as well as PlanB, an analyst whose work on bitcoin’s stock-to-flow ratio has set a quasi-precedent.

In fact, Bayern LB, attributed their findings to both Ammous’ and PlanB, becoming so compelled they felt the need to test the method themselves:

Bayern LB attribute their findings to PlanB and Safidean Ammous. | Source: Twitter

Supply and Demand

According to the researchers, one of the reasons gold has stood in such high demand for so long is due to its scarcity. Gold, much like bitcoin, cannot be whimsically increased; moreover, gold yields a relatively limited annual production and already has a substantial foundation of supply. These two attributes make the yellow metal relatively impervious to dilution, gifting it with the current highest SF value of all commodities.

Interestingly, the report also suggests that SF acts as an attested judge of monetary utility:

The stock-to-flow ratio also serves as a quality criterion for monetary…

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