Quantitative Research

Realized Cap assigns a price to each UTXO at the time of last outgoing transaction. Realized Cap de-emphasizes lost or unused tokens and presents a final layer of the entire ecosystem’s cost basis.

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Begins with an excellent summary on Bitcoin valuation history and subsequently introduces 1) Relative Unrealized P&L, which quantifies investor sentiment; 2) Liveness, which quantifies the extent to which savers are using a crypto; and 3) HODLer Net Position Change, which quantifies whale buying and selling.

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Delta Cap is a hybrid indicator that is partially fundamental analysis and partially technical analysis. Delta Cap is the difference between Realized Cap as defined by CoinMetrics and Average Cap defined as the simple moving average of market capitalization life-to-date.

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Building on top of Nic Carter’s Realized Cap metric, Realized Cap is compared to Market Cap, which is presented historically side-by-side and also as an oscillating ratio. MVRV has become a staple valuation metric.

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A compelling case made for the accuracy of logarithmic regression in predicting BTC price. Uses Facebook user growth to exemplify the power of this methodology. Adding bull and bear cycle analysis on top of the logarithmic regression increases forecasting precision.

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Building on top of MVRV, “MVRV Z” normalizes the MVRV oscillator as a Z-score and compares that to BTC historical Market Cap, Realized Cap and the log trend of Realized Cap. Even further signal is brought to the Realized Cap metric with this article.

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The HODL Wave chart is a seminal visualization of the BTC’s UTXO age distribution, bucketed into age categories from <1D to>5Y. HODL Waves is the historical analysis of large-scale market behavior.

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Liveliness is defined as the ratio of the sum of Bitcoin Days Destroyed to the sum of Bitcoin Days Created and is presented as a percentage from 0 to 100%. Liveliness gives insight to behavior of investors. It increases as long-term holders liquidate positions and decreases while they accumulate and HODL.

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Network Momentum quantifies the relationship between Bitcoin’s price and the BTC value of daily transactions flowing through the blockchain. Introduces three phases of BTC cycles based on differing stages of that relationship: 1) Early bear phase; 2) Late bear phase; and Bull phase.

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NVT Ratio is the ratio of network value to transactions value and is used to identify periods of over and under valuation.

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Builds on the existing NVT Ratio work, modifying the original approach from Willy Woo by using a 90-day trailing average rather than the 14 day forward and 14 day trailing average presented by Woo. The 90-day trailing average presents a faster signal for identifying tops.

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Theoretical framework comparing the purchase of a crypto asset today to a call option on massive potential future upside with an unknown, but potentially long timeframe and enormous volatility.

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Proposes a Price-to-Metcalfe Ratio using a smoothed, modified Metcalfe-implied price based on active addresses.

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Metcalfe’s and modifications to Metcalfe’s Law are applied to Daily Active Addresses to create upper and lower bounds for Bitcoin Valuation based on network activity.

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A critique of the INET valuation model as presented by Chris Burniske and an in-depth review of Velocity as it is currently understood for crypto assets.

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Presents a modified Metcalfe approach to valuing crypto assets via application of the Netoid Function to daily active addresses.

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