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Bitcoin and the Quantity Theory of Money – Why Bitcoin is Undervalued

“In the long run, increasing the money supply faster than the real growth of the economy will always lead to inflation” writes unknown author for If you were awake in your college economics class you might recall Milton Friedman’s classic theory: The quantity theory of money.The root of understanding the quantity theory of money is the equation of exchange,  MV=PQ. Ok, what does the formula mean again?. Applying it to bitcoin, we can say that changes to the Q of the world bitcoin ecosystem will have proportional changes in the market cap of bitcoin.Increasing the money supply pulled up prices.

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