On December 17, 2020, Bitcoin rose to 2.45 million yen, a new record high.
Will it rise from here?
Or will it fall as much as in 2017?
Among various forecasts, according to the analysis of PlanB, a well-known analyst in the cryptocurrency industry, it is predicted that it will reach 5.8 million yen in 2021. It may seem a bit crazy, but it is based on past price movements and is supported enough to be introduced in a report by an investment trust management company.
This time, I will introduce the story that such Bitcoin may still rise.
◯Bitcoin whose rarity value continues to increase.
Bitcoin (BTC) has an issuance limit, so its rarity value is attracting attention.
With global monetary easing, investment is now being made as an asset as an inflation hedge, just like gold.
Suddenly here, do you know how the “rare value” of Bitcoin is determined?
PlanB advocates a model called “stock flow ratio”.
The price of Bitcoin is determined by the supply and demand such as “I want to buy / sell”, but knowing the rare value, which is one of the factors, will be useful for future investment.
First of all, Bitcoin is designed to inflate about every four years. This is because Satoshi Nakamoto, the inventor of Bitcoin, is strongly influenced by rare precious metals.
The graph above shows how Bitcoin is inflated as the number of issued coins decreases with each half-life that occurs about every four years.
If you look at this graph, you can see that the rarity value of Bitcoin seems to increase gradually, without any difficulty.
◯Predict Bitcoin price from stock flow ratio.
In addition, there is a formula called “S / F (stock flow ratio)” that can clearly quantify the rare value of Bitcoin.
This stock is the total number of Bitcoins issued, the flow is the number of annual issuances, and the higher the number obtained by dividing the flow from the stock, the higher the rarity value.
For example, the rarity value of Bitcoin as of December 2020 is calculated by the following formula.
18.45 million BTC (number of issued sheets) ÷ 320,000.85 BTC (annual issuance amount) = 56.164 ….
Rarity value is around 56.
The stock flow ratio also applies to precious metals. Comparing gold, silver, platinum and Bitcoin, the rarity of Bitcoin has already overtaken gold and platinum and is closer to gold.
It is only visible until the end of 2017, but you can see that the market capitalization and the rarity value are increasing proportionally for each half-life.
Also, by the end of 2017, market capitalization and rarity are already on par with silver.
From this graph, Plan B says that Bitcoin’s market capitalization will reach $ 1 trillion by 2021 if it stays the same. In other words, the price is expected to be about 5.8 million yen.
◯Even if “1 BTC = 5.8 million yen”, you can buy Bitcoin from a small amount.
In addition, there are many theories about Bitcoin price prediction, but PlanB’s prediction on the theme of rare value is convincing and easy to understand without specialized knowledge.
If this theory spreads to a wider range of people, it will be a trigger for those people to buy Bitcoin, and it may rise to 5.8 million yen in 2021.
However, Bitcoin can be purchased from 0.0001 BTC (580 yen) on many virtual currency (cryptographic asset) exchanges even if it reaches 5.8 million yen.
Bitcoin, which can be purchased from such a small amount and has room for price increase like this time, may become a popular investment product along with stocks and FX (Foreign Exchange Margin Trading) in the near future.