Could Bitcoin's halving push its price to $55,000? One quant thinks so

According to one crypto quant, the halving could push bitcoin's price to $55,000.

According to PlanB, a cryptocurrency quant, the Bitcoin block reward 'reduction event,' scheduled to occur in May 2020, has the potential to bring bitcoin's price as high as $55,000.

Every four years a halving occurs that cuts the reward in half, with the latest halving scheduled to reduce the reward from 12.5 BTC to 6.25 BTC. This process was intentionally built into Bitcoin to keep inflation of the cryptocurrency in check while creating scarcity around the asset.

The valuation used in the analyst's bitcoin price prediction looked at the "Above-ground," or in circulation, stock of different assets relative to new supply.

According to the report, bitcoin is a "Very scarce" asset in terms of its stock-to-flow ratio.

The report found that Bitcoin currently has an SF of 25, which means it would take 25 years of production to reach Bitcoin's current circulating supply of 17.5 million coins.

Since the supply of bitcoin is fixed at 21 million there are only 3.5 million BTC left to be mined.

The analyst asserts the halving event will inevitably increase the SF ratio, putting bitcoin's market capitalization as high as $1 trillion by 2022.

Such a high market cap would mean that a single Bitcoin would be worth around $55,000, the report found.

The report notes that the funds needed for a $1 trillion Bitcoin market cap would come from a variety of sources, including gold and silver, billionaires hedging against quantitative easing, and institutional investors wanting to switch to an asset that has been the "Best performer in the past 10 years."