Bitcoin has stagnated in recent weeks after soaring to about $60000 per bitcoin in March. Since the latest bull market began in October 2020, bitcoin prices have risen nearly 500%, driven by bullish Wall Street banks and Tesla billionaire Elon Musk. Now, bny Mellon, the Wall Street giant, said in a new report that the controversial stock circulation model of bitcoin predicts that bitcoin will reach $100000 in July. Bny Mellon analysts wrote in a report last week: "the equity ratio is one of the more interesting valuation concepts, and despite its flaws, it is worth understanding." The bank is entering the bitcoin game after announcing plans to hold bitcoin and other cryptocurrencies on behalf of its customers in February.

The simplicity of many forms, from inventory to circulation, is elegant (and possibly flawed), wrote the bank's researchers. "It provides the relativity to link bitcoin to a more mature gold market / framework." The stock circulation pricing model created by anonymous twitter user PlanB claims to be a Dutch institutional investor with legal and quantitative financial background. It manages about US $100 billion of assets and tweets through @ 100trillionusd. The ratio is based on the relationship between the supply of existing assets and the circulation.

For commodities such as gold, the maximum inventory flow ratio is 62, which means that it takes 62 years of gold production time to obtain the current gold stock. Therefore, it has a higher inventory flow ratio, and is valued by investors due to the scarcity of investors. The ratio of silver production to circulation is 22 years, which can reach the current silver inventory. After bitcoin halved for the third time earlier this year, bitcoin's stock liquidity ratio is now 50, which halves bitcoin rewards for maintenance miners from 12.5 to 6.25.

Since its establishment, the price model based on inventory has drawn the price chart of bitcoin. The model predicts that the value of each bitcoin could reach $1 million by 2025.

Bny Mellon's report examines several possible bitcoin valuation models, saying asset valuation is "more important than science.".

"The largest financial market, for example, is the global money market. For hundreds of years, money has been used in one form or another. But so far, there are still several competing currency valuation models, each with its own advantages and disadvantages, the bank's analysts wrote. "In the end, bitcoin's valuation is likely to be a combination of multiple models and will continue to evolve, especially when it is recognized by the mainstream." However, in recent years, the pricing model of bitcoin based on inventory has been a controversial topic in the bitcoin industry, and some people call it "absolutely useless".

(2021-4-6)