Bitcoin's stock-to-flow model and network effect give it significant advantages.
Investors should be wary of Bitcoin's volatility.$BTC
Macro investor Luke Gromen stated that Bitcoin will reach $93,538 and outperform traditional investment vehicle gold. Gromen stated that Bitcoin will gain value in the long term due to factors such as stock-to-flow ratio and network effect. The famous investor predicts that Bitcoin will outperform gold even if it does not receive support from the US government.
According to Gromen, Bitcoin has a higher stock-to-flow ratio than gold, meaning it will gain value when supply is restricted. With halving processes that occur every four years, Bitcoin’s supply decreases, giving it a major advantage over gold. “Bitcoin has a higher stock-to-flow ratio and is in a strong position with its energy efficiency. It also gains a significant advantage thanks to the growing network effect,” Gromen said.
Bitcoin’s value continues to increase thanks to the growing network effect. Gromen believes that as long as these effects continue, Bitcoin will maintain its advantage over gold. These factors make Bitcoin an attractive option for investors. However, Gromen also emphasizes that Bitcoin’s volatility should be taken into consideration.
Bitcoin price fluctuations continue to pose significant risks for investors. Gromen explained, “Despite its surface volatility, Bitcoin has outperformed gold. However, investors need to carefully manage their positions, taking this volatility into account.” Although Bitcoin experiences more daily price changes than gold, it draws attention with its long-term returns.
Bitcoin is currently trading at $90,593, up nearly 2%. This increase reflects investor interest in Bitcoin’s fundamentals. Bitcoin’s energy usage and scarcity-based model are among the key factors supporting its long-term appreciation.
Luke Gromen’s assessments suggest that Bitcoin could be a significant alternative to gold. However, it is also emphasized that investors should take a strategic and careful approach to Bitcoin’s volatility. In times of economic uncertainty, these features of Bitcoin could reshape the role of digital assets in financial markets.
