Oct 30, 2019

Bitcoin's network value

There are a number of ways you can value an asset. Here are the 2 most important ways.
  1. Cost Method -How quickly you get your investment back
  2. Market Value Method -What someone will pay you for the asset
When analyzing Bitcoin's market value we see a 140 Billion variation over the last 2 years; which is why there is a lot of truth to the fact that most people don't understand Bitcoin.
Another way to evaluate is via what people have paid for it.
This is called realized market cap. As you can see by the graph people as a whole have paid 102 Billion to store Bitcoin in their wallets. The value really went up 2 years ago when some people where paying US$20k to get a Bitcoin. If you average the cost out per Bitcoin -- Realized Market cap divided by active wallets-- people will have paid US$5700 for 1BTC. This means to me the cost of Bitcoin going below US$5700 is slim.

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