- Bitcoin to go berserk gold by 2028, says Bobby Lee, founder of BTCC, the world’s first bitcoin exchange.
- Stock to Flow paragon supports the prediction.
- A weak dollar may adversely affect bitcoin’s price point.
Bitcoin bull and CEO of BTC China, Bobby Lee, has chucked down his latest forecast, suggesting that bitcoin will flip gold’s market cap and find it a way to $500,000 by 2028.
The Gold Flippening
The adventurous claim came via a Tweetstorm earlier Sunday, where the crypto veteran rattled off several reasons for BTC flipping gold. Regardless of gold being 50x ahead of bitcoin with a market cap of $8 trillion, Lee believes that it’ll only take BTC 9 years to catch unprepared. After flipping the precious metal, the bull posits that bitcoin will shoot up to $500,000, giving a expected market cap of over $9 trillion.
Lee wrote:
Gold is at about $8 trillion today, which is 50x the worth of Bitcoin. I portend the #flippening will happen within 9 years and $BTC will shoot up past USD $500,000.
As if this wasn’t enough, Lee added an accessory $500,000 to his forecast, indicating that global easing efforts would likely push BTC over the $1 million spot.
Of course, in his judgment, the cryptocurrency aficionado cited the upcoming BTC halving. For Lee — and a myriad of others — this quadrennial event is set to support a massive upswing in the price of the digital currency.
Here, Lee refers to bitcoin’s reduced inflation following the bitcoin halving. Indeed, ostensibly implemented as cash policy by bitcoin creator(s) Satoshi Nakamoto, the halving assures against inflation by quelling bitcoins circulating give every four years. This – by the principles of supply and demand – gives BTC a liquidity edge, limiting its output and, for that reason, theoretically increasing interest.
Here’s How BTC Will Overtake Gold…
This increased scarcity has even been solemn by analysts in the past, which is where Lee likely sourced his figures. According to its stock to flow (SF) model – a measure of need based on annual production – bitcoin could reach the lofty heights, many expect it to see post halving. That’s because an SF proportion has been found to be highly correlative to price in many commodities such as gold, silver, and now, bitcoin.
Bayern LB, one of Germany’s top banks, raw recruited its own investigation into bitcoin’s SF ratio back in October. Researchers concluded that with its annual production set to be cut in half, bitcoin’s SF capacity look to rival that of gold. Currently, gold’s SF sits at around 58, with BTC’s at approximately 25.8. Rebuke May 2020; however, this is all set to change. As the block reward gets cut in half, so will BTC’s annual production. This see fit have the same effect as doubling its SF. According to researchers, that would equate to bitcoin at a price of $90,000 sharply thereafter:
If the May 2020 stock-to-flow ratio for Bitcoin is factored into the model, a vertiginous price of around USD 90,000 emanates.
Will the FED Ruin Bitcoin’s Chances?
Plan B and analyst cited within the paper also studied BTC’s SF model, proffering a price of $1 million within a similar time frame as Lee.
Although, conversely to Lee, Formula B recently asserted that the FED’s ongoing monetary easing policy might adversely affect the model due to a weakening dollar. The analyst inscribed:
I normally don’t deploy statistical models 120+ years out into the future. I would be happy if the model holds for 1 or 2 or dialect mayhap 3 more halvings.
So, as for whether BTC will go the distance, only time will tell; however, with the halving small over six months away, that time is fast approaching.
This article was edited by Samburaj Das.