This excellent research report from German bank Bayern LB sets out the importance of stock-to-flow ratios to the valuation of assets and looks at this in the context of valuations for Gold, Silver, Palladium, Platinum and Bitcoin.
The report concludes that...
'It becomes clear that Bitcoin has been conceived as an ultra-hard type of money. In 2024 (when the next halving is due to take place (after the 2020 halving)), its degree of hardness will inexorably increase even further, to a level unprecedented in human history (a stock-to-flow ratio of more than 100!). Nobody really knows what repercussions such a monetary standard would have. Only one thing is clear: if Bitcoin is indeed to become the money of the 21st century, it will be because its properties (above all its high degree of hardness) have been preferred to those of alternative types of money - after all Bitcoin is a completely open monetary system operating on a purely voluntary basis.'
Meanwhile, this week, the Dutch Central Bank advised that ...'If the whole system collapses, the gold reserve can serve as collateral to start from scratch...' It's interesting to think that here in 2019, 417 years since the formation of the worlds first joint stock company in 1602 (the Dutch East India Company), the Dutch are still valuing hard commodity/money so highly. They are not alone, the central banks of China, Russia and Poland are currently buying gold at record levels.