Is Bitcoin Overvalued?
612 sats \ 9 comments \ @bitties 26 May bitcoin
Here’s a look at the Market Value to Realized Value Z-Score.
(2010-2023)
This metric simply compares the market value to the realized value.
  • Market Value: current price of Bitcoin multiplied by the circulating supply.
  • Realized Value: similar to market value, but uses the price at which each coin last moved.
A market top (red zone) is categorized by market value being significantly higher than the realized value.
A market bottom (green zone) is categorized by market value being significantly lower than the realized value.
Taking a look at the chart above, notice how the MVRV ratio has only just bounced off of the green zone?
Using this metric, we can see that the best time to purchase Bitcoin is when it's in the this zone.
Bitcoin still has a loooonnnngggg way to go before it’s anywhere near the red zone.
We’re only just getting warmed up for whats to come.
Interestingly, this metric has consistently picked the cycle tops to within two weeks.
So it’s definitely one I’ll be checking in on.
Bitcoin will be eating for a long time.
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50 sats \ 1 reply \ @grayruby 27 May
Realized cap is also a great way to shut a shitcoiner up. Like when they say ETH has outperformed Bitcoin since eth’s launch. While technically accurate, you can compare realized cap between the two during that period of time and kindly, or not so kindly, point out that the outperformance was only due to ETH being an incredibly small asset for many years and in fact during that period of time Bitcoin has sucked in more than 200B dollars more capital than ETH. So as soon as ETH hits the law of large numbers it wont outperform anymore.
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20 sats \ 0 replies \ @bitties OP 27 May
Just because it had a leg up from the natural curiosity of humans. Progression from Bitcoin-Eth and beyond.
Luckily, if you stay on that path and keep your eyes and ears open, it leads you to the truth.
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50 sats \ 6 replies \ @Undisciplined 26 May
I really like these succinct analyses.
I’d be curious to get your thoughts on a post I made about Bitcoin valuation #474759.
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52 sats \ 5 replies \ @bitties OP 26 May
It's a clever way to show the uncertainty and dual nature of Bitcoin's potential.
Intellectually stimulating, useful, and just plain fun to use.
Real-world use, I’m not sure if it could ever truly replicate market conditions.
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50 sats \ 4 replies \ @Undisciplined 27 May
Before that, I had only really been thinking about Bitcoin's value from taking over the medium of exchange role. It's really interesting that medium of exchange and store of value are so similarly valued.
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42 sats \ 3 replies \ @bitties OP 27 May
I’ll probably get shot for saying this, but it’s already a better store of value than it is a medium of exchange.
Now, with development then obviously the inverse could be true. It’s also the outcome I prefer.
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30 sats \ 2 replies \ @Undisciplined 27 May
Is that not the normal view? It's definitely right.
I didn't realize that I wasn't accounting for it, because I wasn't making the connection that so many assets have a huge monetary premium as a result of fiat being such a bad store of value.
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42 sats \ 1 reply \ @bitties OP 27 May
You are probably right, I was victimizing myself XD
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20 sats \ 0 replies \ @Undisciplined 27 May
Ha, you should probably leave that to others. They're usually more than happy to pile on.
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