Is the current bitcoin price fair?

Like any new technology or company that promises a dramatically different future, there is a lot of hype around its price. The market gives such companies, a high P/E multiple. For loss making high growth companies, there are other models based on number of users, user engagement etc.

There is a growing body of theory which is forming to analyse the prices of crypto assets like bitcoin. Here are a few of them. I will update this post as I find more models.

Mayer Multiple

Mayer multiple is the multiple of the bitcoin price over the 200-day moving average. As of today, the average Mayer Multiple is 1.47 for the history of Bitcoin. The chart helps in deciding the current sentiment of the market towards the bitcoin price.

Bitcoin NVT (Network Value To Transaction Ratio)

NVT Ratio (Network Value to Transactions Ratio) is similar to the PE Ratio used in equity markets. Network value is the current bitcoin price. Transactions are the value of bitcoin transactions on the blockchain. It is a reflection whether price and use of bitcoin is moving in the same direction. If yes, it indicates the current bitcoin prices are based on demand. If not, it indicates that current bitcoin prices are higher compared to this principle.

I will add more such models in future.

Bitcoiner