Bitcoin price prediction charts use a lot of different criteria. But they typically have one common trait – they all forecast exponential gains.
Since the beginning of the year, I've seen more and more examples of a Bitcoin chart based on a property historically applied to commodities, such as gold and oil.
The pattern it illustrates fits well with the historical Bitcoin price data we have so far. And it implies extraordinary price increases over the next decade – to $3.2 million per bitcoin.
The property these charts are using is something called the stock-to-flow (STF) ratio. That may sound intimidating and complicated, but trust me, it's a simple and straightforward concept.
The idea is that you take the existing stock of a commodity and divide it by the fresh supply that's added every year (the flow).
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So let's use gold as an example. The “stock” of gold is quite high because nearly all of the gold ever mined – about 193,472 metric tons according to the World Gold Council – still exists and is held somewhere by some entity.
The “flow” is the amount of gold mined annually, which has averaged about 3,120 metric tons over the past decade.
Dividing the stock by the flow gives you a ratio of 62, which means it would take 62 years of gold mining to replace the existing stock. It's by far the highest of all commodities; silver is a distant second with a stock-to-flow ratio of 22.
So what does all this have to do with the price of Bitcoin?
Let's dig a little deeper…to find out more, visit moneymorning.com.
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