As central banks continue to print money like there is no tomorrow, DOUBLE DOWN talks to Plan ₿ about the case for bitcoin in which the inflation in new supply has just been cut in half. Plan ₿ looks at the stock to flow ratio in order to price the value of bitcoin. Stock to flow ratios are used to evaluate the current stock of a commodity against the flow of new production and is most often used when determining the value for precious metals like gold. For store of value commodities, like gold or bitcoin, a high ratio indicates that they are mostly not consumed in industrial applications and, the higher the ratio, the more scarce.
Tune in to hear more on oil and its outlook in a world of lockdown. Aside from the rising price, however, Plan B feels that bitcoin is no longer an asset. It is a metric. A unit of account. Our global financial system is currently built on a unit of account that is changing in value and quantity every day. Imagine an architect having to build with a measurement that changed length every day. With bitcoin as a measuring stick for global trade, however, more stability should follow. Tune into DOUBLE DOWN to hear more about Plan ₿.
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