Bitcoin and GoldPreviously, we mentioned that Bitcoin’s STF ratio is similar to that of gold. Currently, there are roughly 19 million bitcoins in circulation and 657,000 bitcoins are generated every year. Therefore, by dividing these numbers, we find that Bitcoin has a 27 STF ratio, compared to that of 62 for gold. However, Bitcoin’s STF ratio decreases with time, since BTC undergoes periodical block-reward halvings — which cuts in half the amount of BTC produced. Furthermore, the asset has a fixed supply of 21,000,000 coins. The next Bitcoin block-reward halving is set to be on May 2020. After it, BTC will be generated at a rate of about 330,000 coins a year, giving an STF ratio of 53. This number will increase to 106 by the following halving in 2024, finally surpassing that of Gold. Therefore, if we go by the STF ratio alone, Bitcoin should be perceived as more valuable than gold — living up to its moniker of “digital gold.”
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.