There is too much money to spend. This should help Bitcoin (BTC) reach its next phase of massive increases. This is what analysts say.
Jeroen Blokland works as an asset manager at Robeco. He is a portfolio manager there. On August 25, Blokland noted that the United States M2 money velocity had hit historic lows.
Velocity measures the speed at which money circulates in the economy. 2020 has seen a crash in this metric. Blokland said that, theoretically, when economic activity increases, the velocity of money rises. When it came to printing money, the Federal Reserve was the most prominent participator. The moves from the Federal Reserve characterized the period since March. That was when coronavirus sparked a cross-asset market crash.
The rise in safe-haven assets (Gold, Silver, Bitcoin) – in G4 nations- has come in tandem with rising central bank balance sheets. That is what Cointelegraph reports. PlanB is the quant analyst behind the forecasting models for the stock-to-flow of bitcoin.
PlanB will only serve to accelerate the most significant cryptocurrency on its way to recent predictions with the collapse in money velocity. The latest forecast was an average of $288,000 by 2024.
The stock-to-flow cross-asset model (S2FX) delivers bitcoin’s multiple phases as an asset. The $288,000 price point forms part of phase five. PlanB talked in March concerning the S2FX. It said that $288k is the S2F-market value centroid (cluster center) of the next phase. The 6700 was the cluster of last and current phase. PlanB made that comment on the explanatory chart.
Blokland made warnings concerning the impact of low velocity on financial policy. This week, the Federal Reserve was widely tipped to announce plans to raise its target of inflation to up to 4%. Furthermore, he added that the low velocity of money means that even more money is a must to create inflation. However, that has resulted in asset price inflation.