As my previous post pointed out (www.russell-clark.com/p/bitcoin-update) - short interest in bitcoin has mainly been squeezed out, and further appreciation would need to be driven by value creation. Since the last update at the beginning of the month, there has been no increase in turnover in bitcoin.
I watched something the other day that I found interesting - a valuation model that Raoul Pal developed that appears to work not only for BTC but also for other crypto assets. It's a metcalfe's law analysis that suggests that value grows along with adoption so long as people are actually transacting. He explains it & shows the charts in this vid at 13:40-16:00: https://www.youtube.com/watch?v=OAA33NL3mBk&list=PL33zxjMywve1AS0EDTNHHUt0pi9PZHF5C&index=37
Being a lawyer, it's not within my skillset to analyse this properly, but from what I understand, as long as adoption continues, the price should continue to rise over time (makes sense). However, not sure what happens when network adoption starts to plateau and/or transacted value on the BTC network stops growing (for example if transactions move to lower cost solutions like the layer 2 lightning network). Some have suggested that at the adoption saturation point the price just plateaus.
I would be interested in your thoughts on Raoul's model (appreciating though that your time is valuable and your focus is probably more on other things...).
Keep an eye on the decentralized stablecoin UST linked to the Terra protocol. It’s experienced rapid growth in TVL and could be a more scalable future solution.
Don't understand the graph of BTC price vs USDT and USDC volumes. Previous correlation has broken down... but what is the conclusion we are supposed to draw from this? BTC price will play catch up on the downside? Or correlations is just broken for good now? Thanks.
hey Russell. definitely echo the comments of look beyond USDT, USDC has grown alot, UST is now growing very fast (leading the algorithmic stablecoin space), as are the EUR stablecoins - since the industry knows SEC et al has USDT in their sights for obliteration. Interesting SI has dropped, since the massive consensus view was for a December rally to the moon across digital assets.
Interesting post Russell. FWIW here is my take. BTC has been highly correlated with US 10 year interest rates (though with a variable lead/lag) and that makes sense if you believe that Bitcoin is correlated with global liquidity. Regarding Tether I would note that USDC and other stable coins are going in popularity as well.
Have updated the post to include USDC volume with Tether - makes no difference to conclusion
Hi Russell,
I watched something the other day that I found interesting - a valuation model that Raoul Pal developed that appears to work not only for BTC but also for other crypto assets. It's a metcalfe's law analysis that suggests that value grows along with adoption so long as people are actually transacting. He explains it & shows the charts in this vid at 13:40-16:00: https://www.youtube.com/watch?v=OAA33NL3mBk&list=PL33zxjMywve1AS0EDTNHHUt0pi9PZHF5C&index=37
Being a lawyer, it's not within my skillset to analyse this properly, but from what I understand, as long as adoption continues, the price should continue to rise over time (makes sense). However, not sure what happens when network adoption starts to plateau and/or transacted value on the BTC network stops growing (for example if transactions move to lower cost solutions like the layer 2 lightning network). Some have suggested that at the adoption saturation point the price just plateaus.
I would be interested in your thoughts on Raoul's model (appreciating though that your time is valuable and your focus is probably more on other things...).
With thanks
MK
Keep an eye on the decentralized stablecoin UST linked to the Terra protocol. It’s experienced rapid growth in TVL and could be a more scalable future solution.
Don't understand the graph of BTC price vs USDT and USDC volumes. Previous correlation has broken down... but what is the conclusion we are supposed to draw from this? BTC price will play catch up on the downside? Or correlations is just broken for good now? Thanks.
hey Russell. definitely echo the comments of look beyond USDT, USDC has grown alot, UST is now growing very fast (leading the algorithmic stablecoin space), as are the EUR stablecoins - since the industry knows SEC et al has USDT in their sights for obliteration. Interesting SI has dropped, since the massive consensus view was for a December rally to the moon across digital assets.
Interesting post Russell. FWIW here is my take. BTC has been highly correlated with US 10 year interest rates (though with a variable lead/lag) and that makes sense if you believe that Bitcoin is correlated with global liquidity. Regarding Tether I would note that USDC and other stable coins are going in popularity as well.