Bitcoin bull and CEO of BTC China, Bobby Lee, has thrown down his latest forecast, suggesting that bitcoin will flip gold’s market cap and find it a way to $500,000 by 2028.
The bold claim came via a Tweetstorm earlier Sunday, where the crypto veteran rattled off several reasons for BTC flipping gold. Despite gold being 50x ahead of bitcoin with a market cap of $8 trillion, Lee believes that it’ll only take BTC 9 years to overtake. After flipping the precious metal, the bull posits that bitcoin will shoot up to $500,000, giving a proposed market cap of over $9 trillion.
Gold is at about $8 trillion today, which is 50x the worth of Bitcoin. I predict 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 extra $500,000 to his forecast, indicating that global easing efforts would likely push BTC over the $1 million mark.
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 provide 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 monetary policy by bitcoin creator(s) Satoshi Nakamoto, the halving assures against inflation by quelling bitcoins circulating supply every four years. This – by the principles of supply and demand – gives BTC a liquidity edge, limiting its output and, therefore, theoretically increasing interest.
This increased scarcity has even been measured by analysts in the past, which is where Lee likely sourced his figures. According to its stock to flow (SF) model – a measure of scarcity based on annual production – bitcoin could reach the lofty heights, many expect it to see post halving. That’s because an SF ratio 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, initiated 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 might look to rival that of gold. Currently, gold’s SF sits at around 58, with BTC’s at approximately 25.8. Come May 2020; however, this is all set to change. As the block reward gets cut in half, so will BTC’s annual production. This will have the same effect as doubling its SF. According to researchers, that would equate to bitcoin at a price of $90,000 shortly thereafter:
If the May 2020 stock-to-flow ratio for Bitcoin is factored into the model, a vertiginous price of around USD 90,000 emerges.
Plan B and analyst cited within the paper also studied BTC’s SF model, suggesting a price of $1 million within a similar time frame as Lee.
Although, conversely to Lee, Plan B recently asserted that the FED’s ongoing monetary easing policy might adversely affect the model due to a weakening dollar. The analyst wrote:
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 maybe 3 more halvings.
So, as for whether BTC will go the distance, only time will tell; however, with the halving little over six months away, that time is fast approaching.