Bitcoin Value Indicator – October 2018

October 1, 2018 BitcoinTalkRadio 0 Comments

If this is your first time reading a Bitcoin (BTC-USD)(COIN)(OTCQX:GBTC) Value Indicator report, you may want to refer to the original article, where I explain the three strongest corollaries with Bitcoin’s market cap. You also may want to read the first Bitcoin Value Indicator report, published in July of this year, where I explain further how I turned those metrics into a consolidated system.

If that’s too much work for you, I can sum up. With Bitcoin you need to think log scale. When you do that, strange things happen, like you start to understand what’s going on. All of the sudden the price of Bitcoin becomes less of a mystery, and something you might build a career by writing about. Thank you, I’ll be here all week.

Unique Addresses

Recall that unique addresses are a proxy for the number of users, because they indicate how many non-zero Bitcoin addresses are in use. This metric has its strengths and weaknesses, which I wrote about here. Also, I have reviewed several other pricing methods which attempt to do the same thing using Metcalfe’s Law. You can find those here and here.

What does the data say?

Well, the more people use Bitcoin, the more it’s worth. Essentially the value is in the network, much like with Facebook (FB) or Twitter (TWTR). Let’s have a quick recap of where we’ve come from and where we are now.

Source: blockchain.com

That low point in unique addresses is a point where Bitcoin was hovering around $6,900 USD back around April 11, 2018. Using the seven-day average of the number of unique addresses (which smoothes out low points caused by low volume on the weekends), you can see that growth has returned since April to this underlying fundamental. The price today is lower, but the number of users appears to be growing again, and this time the network can support more transactions than before due to the rise of Segwit Adoption. If I had to guess I would say Bitcoin could now handle 50% to 100% more transactions per second than when we had the last peak in December/January.

Original story by: https://seekingalpha.com/article/4209196-bitcoin-value-indicator-october-2018