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For PlanB, the quant analyst behind the infamous stock-to-flow Bitcoin price forecasting models, the collapse in money velocity will only serve to speed up BTC on its way to recent predictions – an average of $288,000 by 2024.
The stock-to-flow cross-asset model (S2FX) delivers multiple “phases” of Bitcoin as an asset, and the $288,000 BTC price point forms part of phase five.
“S2FX: $288k is the cluster center (S2F-marketvalue centroid) of next phase, like $6700 was the cluster center of last/current phase,” PlanB tweeted in March, commenting on an explanatory chart.
“We don’t know exactly (yet) when phase 5 starts and ends, but looking at past clusters: roughly 6 months after 2020 halving, until 2024 halving+6m.”
Meanwhile, Blokland warned about the impact of low velocity on financial policy. This week, the Fed is widely tipped to announce plans to raise its inflation target to up to 4%.
“The low velocity of money also means that even more money is needed to create inflation. So far, however, this has only resulted in asset price inflation,” he added.
There is “too much money to spend,” and this will help Bitcoin (BTC) reach its next phase of huge price increases, analysts believe.
In a blog post on Aug. 25, Jeroen Blokland, portfolio manager at asset manager Robeco, noted that U.S. M2 money velocity had hit historic lows.
Velocity measures the speed at which money moves around the economy, and 2020 has seen a crash in the metric.
“Theoretically, the velocity of money rises when economic activity increases,” Blokland wrote.
“While the sudden economic stop obviously resulted in much lower economic activity, the sharp decline also suggests there is just too much money to spend. A quick look at central bank balance sheets confirms this.”
The huge money printing activities by the Federal Reserve alone have characterized the period since March, when coronavirus sparked a cross-asset market crash.
Rising central bank balance sheets in G4 nations have come in tandem with rises in safe haven assets — Bitcoin, gold and silver.
In other trending Bitcoin News today:
Anthony Pompliano Names Three Reasons Why Warren Buffett Should Buy Bitcoin
Morgan Creek Digital co-founder Anthony Pompliano says there are three reasons why legendary investor and fierce crypto critic Warren Buffett should buy Bitcoin.
The Oracle of Omaha recently bought over 20 million shares of Barrick Gold worth about $563 million. Buffett also sold off a significant portion of his holdings in Wells Fargo and JP Morgan, while letting go of all of Berkshire’s positions in Goldman Sachs.
In a letter to investors, Pompliano says Buffett would be well-served to include BTC in his portfolio shakeup.
“Warren Buffett and his team have essentially decided to dump bank stocks and start gaining exposure to gold. This is a complete U-turn from the perspective Buffett has publicly stated for many years, which downplayed the value of gold and boasted of the banks’ future prospects.”‘
Buffett’s investment in Barrick Gold is seen as a move to get exposure to the precious metal amid uncertainty on the future of the US dollar. Pompliano believes billionaire hedge fund manager Paul Tudor Jones made a smarter decision when he invested in Bitcoin.
The Morgan Creek Digital executive says Berkshire should invest 5% – 10% of its cash position in Bitcoin. However, it’s not likely Buffett will do so anytime soon. In the past, the billionaire investor called the king crypto “rat poison” and said cryptocurrencies have no value.
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Show Notes / News Resources:
– $288K Bitcoin Price: https://bit.ly/34yjIvQ
– XRP & BTC Analysis: https://bit.ly/3j5s6qC
– Anthony Pompliano: https://bit.ly/3gqdUa0
DISCLAIMER: This is NOT financial advice. The views and opinions expressed in this video are just opinions, nothing more. Trading is very risky and so is investing into Cryptocurrency. Seek financial advice from a professional and trade at your own risk because I am not responsible for any investment decisions that you choose to make.
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