2020 was the year of Bitcoin, the crypto king. Even 2021 seems to be proving very much similar for the crypto king. BTC value has been shooting up rapidly. This is happening because of multiple factors. One of them is Stock-to-Flow Model.
Every crypto enthusiast planning to make the most of rapidly increasing BTC value needs to seek knowledge about it. Correct knowledge in this can help you make the right decision from the investment point-of-view.
What is Stock-to-Flow Model?
This concept of economics compares Bitcoin with commodities like gold, silver, and platinum. The value of these commodities remains stable because of their scarcity.
Bitcoin, the most popular cryptocurrency in the domain of digital decentralized finance is also scarce. The supply of Bitcoin is always going to be limited. Therefore, BTC value will keep on shooting up from time-to-time.
Definition of Stock-to-Flow Model?
It is used to evaluate the existing stock of any commodity against the flow of new products. The higher the stock-to-flow ratio is, the less the new supply of commodities enters the market.
The impact of Stock-to-Flow on Bitcoin:
Like said above, this unique and complex concept of economics treats the crypto king like gold, silver, and platinum. The stock-to-flow ratio of these commodities mostly remains high. Therefore, the price of these commodities reaches the next level easily and on a consistent basis.
Similarly, the supply of Bitcoin is also limited. In other words, the supply of Bitcoin to the market is limited every four years. This is why the BTC value has gone so high. This is why the price of Bitcoin will keep on reaching the next level rapidly in the future also.
The Bottom Line:
The application of this concept is ensuring the scarcity of Bitcoin. This is taking the BTC value so high. A number of cryptocurrencies likely to join the market are planning to leverage the potential of this conceptโs application.
The LUXURIOUS PRO NETWORK TOKEN, a multi-utility cryptocurrency is also likely to apply the concept of stock-to-flow for consistent growth and a bright future.
Inquisitive minds are advised to communicate with us anytime about a bucket full of questions about the application of Stock-to flow concept for the growth of LPN TOKEN.
Our team will be more than happy to answer your questions.
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