Bitcoin has the same scarce value as gold, silver, antique and other scarce goods have. Surely this digital scarcity has value. But how much? To analyze the possible value of Bitcoin we should look at dependencies in other scarce goods. Why gold cost is much higher than copper, zinc, nickel, etc? It is an elementary economic law that can be explained through the stock-to-flow (SF) ratio.
SF = stock/flow – stock is the size of the existing stockpiles or reserves. Flow is the yearly production.
When SF ratio is high, as gold has – it means that current production is very low in comparison with stock – so this material is very valuable and scarce.
So SF ratio has a direct influence on Bitcoin value. By the author of the article, Bitcoin price can be 55-100k USD after the next halving (The event where the number of generated Bitcoin rewards per block will be halved). Because halving will influence SF ratio through the decrease in yearly