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Tag: valuation

Estimates on the price impact and capital inflows of a Bitcoin ETF

This infographic of Bitcoin’s price is something I’ve been pondering today. It tells Bitcoin’s often dramatic price story in fundamental trend lines on top of which lives some serious doses of speculative activity. There’s a lot in this chart so lets break it down.

  • In late 2015 through to May 2016 we saw a three cats and a moon consolidation pattern play out over 6 months after an MMM pyramid scheme took Bitcoin price action through some exciting times.
  • By early June 2016 we saw a speculative bubble (marked in green above) as the market speculated on the upcoming block reward halving event. This was to be the second halving event, slashing payout and therefore the supply of new bitcoins from 25BTC every 10 minutes to… well, exactly half to 12.5BTC.
  • Leading up to this many people we afraid the miners would exit their protective hashing power, the block processing caught between network adjustments could slow to a crawl and the price could crash. This did not happen. What happened was simply the markets saw less selling pressure from miners who had less newly minted coins to sell. The blue trend shows the steeper rate of price appreciation this had on the markets.
  • Finally what we may be seeing is the Q4 of 2016 to present is the market undergoing a much larger and longer speculative phase for the upcoming Bitcoin ETF decision. If approved hundreds of millions at a minimum are expected to be poured into Bitcoin. Understandably the blue shaded area in our infographic would map to the drawn out and much delayed ETF decision which will finalise on March 11th, 2017.

If this story is fundamentally correct, the picture it paints is quite useful. In fact, we can deduce the impact of what a controlled reduction of coin supply from the markets will have to the price, furthermore we can gauge the amount of capital that the markets expect to be injected.

Continue reading Estimates on the price impact and capital inflows of a Bitcoin ETF

I have a lot of brain-farts on crypto-currency. For more farting, follow me on Twitter @dangermouse117

BTC Tips: 1KrYzd8y6gnJekibZpb4ixif4nJYbaaZct

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Bitcoin Market Cap should be $40b according to Metcalfe’s law

Metcalfe’s Law states the value of a network is proportional to the number of members squared.

I thought it’d be fun to run the numbers on the Bitcoin Network.

Since we don’t have solid figures on the number of active users on the network, I’ve had to use network transactions** as a proxy to active users.

** Network transactions per day excluding long chains (e.g. produced by bitcoin mixers)

Bitcoin Market Capitalisation correlated to Metcalfe's Law

Continue reading Bitcoin Market Cap should be $40b according to Metcalfe’s law

I have a lot of brain-farts on crypto-currency. For more farting, follow me on Twitter @dangermouse117

BTC Tips: 1KrYzd8y6gnJekibZpb4ixif4nJYbaaZct

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Analysis of Dash’s valuation as a function of transaction volume

dash-logo

Dash’s focus is a payment network so transaction turnover will be key. Let’s run some numbers to figure out transaction turnover and market cap valuations…

This is Bitcoin’s transaction turnover as a function of their market cap:

Bitcoin transaction turnover vs market capSource: https://twitter.com/dangermouse117/status/771387879117430784
Source Data: http://bit.ly/2ccjMDI

Continue reading Analysis of Dash’s valuation as a function of transaction volume

I have a lot of brain-farts on crypto-currency. For more farting, follow me on Twitter @dangermouse117

BTC Tips: 1KrYzd8y6gnJekibZpb4ixif4nJYbaaZct

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Filtering out suspect market valuations in the alt-coin space : Ripple, Steem and NEM seem suspect

I ran the numbers on 24hr traded volume (liquidity) vs market cap for the top 40 alt-coins to highlight any suspect valuations. You could say it’s a shitcoin detector, LOL.

 

Continue reading Filtering out suspect market valuations in the alt-coin space : Ripple, Steem and NEM seem suspect

I have a lot of brain-farts on crypto-currency. For more farting, follow me on Twitter @dangermouse117

BTC Tips: 1KrYzd8y6gnJekibZpb4ixif4nJYbaaZct

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