German bank BayernLB research shows: Bitcoin will soar to $90,000 in 2020.

The German state-owned bank Bayerische Landesbank (BayernLB) has released a research report on Bitcoin, conducting an in-depth analysis of the circulation of Bitcoin and predicting a remarkable surge in Bitcoin's value by the year 2020.

Bitcoin and Gold

The report references a circulation model proposed by renowned crypto analyst Plan₿. This model divides the circulation of Bitcoin by the annual production of Bitcoin to assess the scarcity of the commodity.

Historically, gold has been considered the commodity with the highest stock-to-flow ratio. However, according to the circulation model, Bitcoin is projected to be even scarcer than gold, potentially serving as a bullish indicator in the long term. The report's author, Manuel Andersch, stated:

Throughout history, the asset with the highest stock-to-flow ratio has always been used as money in each era, as this achieves the optimal transfer of value.

Despite this, Andersch remains cautious about the report's findings. He believes that even the best statistical models may fail in predicting the future. Additionally, next year's halving of Bitcoin production will challenge the total market value of gold.

Gold has recently benefited from central banks' aggressive easing plans. In early September, gold prices reached their highest levels in about five years. Precious metal assets used for hedging have been on a bullish trend for months, also due to their high stock-to-flow ratios.

Although Bitcoin has experienced one of its toughest months since November 2018, according to the circulation model in the report, Bitcoin's halving of production will make it scarcer than gold, potentially reaching the current market value of gold, with Bitcoin prices hitting $90,000.

According to a report, the report suggests a strong correlation between Bitcoin prices and the circulation model, claiming that the halving effect has not yet had a positive impact on Bitcoin, estimating that by 2028, Bitcoin's market value will approach $100 trillion.

While the analysis is quite optimistic, considering the current global currency market, this figure is highly unrealistic as $100 trillion would surpass the total market value of all fiat currencies combined. However, it is certain that there is indeed a correlation between the circulation model of assets and their prices.

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