According to Charlie Morris, co-founder and head of the information department for cryptocurrency company ByteTree, the stock-to-power model is wrong.

According to popular theory developed by quantitative analyst Plan B, Bitcoin’s specific offerings are a key feature that will push the price above $ 100,000 in 2021 and beyond.

However, as Morris explained in a recent report, a gradual increase in the supply of new resources will not be enough to trigger the rise in Bitcoin’s value. According to Morris, the stock-to-power theory does not take into account the diminution in importance that the current (above supply) will face in relation to the share (total number of offers traded) in the Bitcoin price.

Morris noted that although the supply of newly mined bitcoins will continue to grow, people will still be able to sell their bitcoins, thereby meeting market demand.

Morris explains his point of view and compares it to other rare assets such as gold: “Nobody believes that if you shut down gold mining, the price of gold will go up indefinitely.

According to Morris, the main driving force behind the price of bitcoin is the level of activity on the bitcoin network. In other words, the increase in bitcoin trading volume will take bitcoin to new heights.

He noted that “the amount of money transferred over the network […] and the price of bitcoin are very interrelated and have always been.”

As Bitcoin matures as an asset, macro factors such as inflation, bond yields, and dollar dynamics will increasingly affect price.

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Source: CoinTelegraph

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