Hello and welcome to this week's Overbit News; our first item is on "PlanB's" well-known stock to flow model. According to crypto expert 'PlanB,' BTC/USD is now the furthest away from his stock-to-flow model's forecasts in over two years.
One of the most popular charts for forecasting significant future Bitcoin price increases reveals the most substantial difference since January 2019. According to the Bitcoin stock-to-flow model, the price of Bitcoin should be around $77,900 at the moment.
However, as of Monday, the cryptocurrency was trading at $33,668, significantly below its all-time high of $ 64,829 set in April. 'PlanB,' a cryptocurrency analyst who has been chronicling his stock-to-flow model since March 2019, stated that BTC/USD is now the furthest away from the predicted value in more than two years. The next six months, he warned, would "make or break" the stock-to-flow strategy.
The stock-to-flow model is commonly used with natural resources such as gold or silver. Commodities are frequently referred to as a "store of value" resources because, in theory, they should preserve their worth over time due to scarcity and low flow. In comparison to the dollar, the argument is that the metals are more like "hard money" due to their scarcity.
This is a highly severe contrast, given that the Federal Reserve has printed more than $ 4 trillion in new dollars since the coronavirus outbreak began in March 2020; this is the same amount that the US central bank had previously issued since its inception in the early twentieth century. Bitcoin, dubbed "digital gold" by its supporters, is regarded as a rare commodity for the sake of the model.
Bitcoin is expensive to generate and considered limited, with a maximum quantity of 21 million coins. The cryptocurrency also goes through "halvings," which means that the number of Bitcoins entering the system with each new data block is cut in half. "Bitcoin's supply is finite," stated Charles Morris, founder of ByteTree Asset Management. Because supply is fixed, the price can only be determined by demand."
Closing out today's edition of Overbit News is a jump over to Vietnam, where the country is making strides for a 'deep dive' into cryptocurrencies.
According to news reports, the Vietnamese government wants to explore all the pros and cons of digital currencies in a pilot program led by the Vietnamese central bank.
These reports indicate that Vietnam is taking a holistic approach to the industry, with the pilot program slated to run for two years while the government explores all the pros and cons of the digital currency economy. The news indicates that this pilot program has come at the behest of Vietnam's Prime Minister as a part of its e-government development strategy.
It seems Vietnam is looking to dive headfirst into this strategy, with a heavy focus on the cashless payments side, which Prime Minister Pham Minh Chinh said is an "inevitable trend".
According to Huynh Phuoc Nghia, deputy director of the Institute of Innovation at the University of Economics HCM City, the crypto pilot seeks to assist the government in evaluating the benefits and downsides while establishing an adequate management system.
As countries continue to ramp up their cryptocurrency efforts, it seems Vietnam will undoubtedly be one in southeast Asia to keep an eye on. As always, thanks for reading Overbit news.