TL;DR
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David Puell from ARK Invest and James Check from Glassnode just created a bitcoin research framework that suggests: “The bear market is much worse than expected.”
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According to Dave and Jim, the common method of calculating the market’s average buy price is flawed.
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Once Dave & Jim removed these bitcoins from their calculations, they found that the market’s average buy price was currently $32,000 per BTC – a solid $8k under bitcoin’s current trading price.
Full Story
David Puell from ARK Invest and James Check from Glassnode just created a bitcoin research framework that suggests:
“The bear market is much worse than expected.”
We’d love to ignore their findings…but 90% of the good investments we’ve made in our lives have come off the back of ARK Invest’s research, so we’re struggling to keep our heads in the sand.
The basic gist of Dave and Jimmy’s research is this:
Investors will often calculate all of the BTC purchases ever made to figure out what the market’s average ‘buy price’ is.
If the average is lower than the current BTC price, the market is in profit (a healthy sign).
If it’s above the average, the market is in the red (not the best sign).
Only problem is, according to Dave and Jim, the common method of calculating the market’s average buy price is flawed.
It takes into account the buy price of a lot of lost bitcoin.
I.e. from wallets that bought BTC at, $1, $10, $100, etc…and then promptly lost their wallet keys (passwords).
This bitcoin is essentially out of commission (the owners will never be able to sell and never will be), which means it can’t ever affect the market.
And for that reason, this dead bitcoin shouldn’t be included in market calculations.
Once Dave & Jim removed these bitcoins from their calculations, they found that the market’s average buy price was currently $32,000 per BTC – a solid $8k under bitcoin’s current trading price.
Which indicates to them that we’re in a tighter spot than previously suspected.
Silver lining?
All bitcoin that is lost only makes the remaining available coins more valuable.
