2/29/2024 0 Comments Bitcoin network effect lyn aldenthe impact of fees on the value of Ethereum (23:36).whether Ethereum 2.0 and Ethereum Improvement Proposal 1559, and whether that could make ETH more investable (21:20).why Lyn views Ethereum’s use case as circular, and why that makes it less investable (15:09).whether Metcalfe’s law applies equally to all kinds of networks (13:35).why Raoul also invested in other coins beyond BTC and ETH (11:47).how to allocate between BTC and ETH (11:22). counterarguments to John Pfeffer’s paper (9:31).an analysis of utility protocols (John Pfeffer’s paper) (6:55).why Lyn decided ETH was not currently investable (5:06).why Raoul views ether as similar to bitcoin at a macro level (1:25).Such loans are made or arranged pursuant to a California Financing Law license.Lyn Alden, CEO and founder of Lyn Alden Investment Strategies, and Raoul Pal, CEO & cofounder of Real Vision Group & Global Macro Investor, explain their thinking about Ethereum and its native token, and talk about their perspective on GameStop. Loans made in California are made by NYDIG Funding LLC. NYDIG, NY\DIG, and NEW YORK DIGITAL INVESTMENT GROUP are registered trademarks of NYDIG. NYDIG Trust Company LLC does business under registered dba names in various states as disclosed here. No NYDIG entity is registered with or licensed by the SEC, FINRA, NFA, or CFTC. In addition, both entities hold money transmitter licenses from a majority of states and are registered with FinCEN as MSBs. NYDIG Execution LLC (NMLS ID: 1781446) holds a BitLicense and a money transmitter license from the New York State Department of Financial Services (“NYDFS”) and NYDIG Trust Company LLC (NMLS ID: 1985471) is chartered as a limited purpose trust company by the NYDFS both entities are authorized by the NYDFS to engage in virtual currency business activities. Please see the NYDIG disclosures or terms and conditions for the particular service or transaction for more details. New York Digital Investment Group LLC is not overseen by any regulator. Only certain NYDIG legal entities or businesses are regulated. Investors in bitcoin could lose the entire value of their investment. Bitcoin investments have historically been highly volatile and are for investors with a high risk tolerance. You should conduct your own analysis and consult with professional advisors prior to making any investment decisions. None of the material on is intended to be, nor does it constitute, a solicitation, recommendation or offer to buy or sell any security, financial product or instrument. This website is provided for informational purposes only. Applying this relationship to potential future network growth of 15%-25% per year suggests a price level range of $51,611 – $118,544 in 5 years. Applying Metcalfe’s Law to Bitcoin’s network, we find that bitcoin’s historical valuation levels are well explained by the square of its addresses. To value bitcoin, we apply Metcalfe’s Law, which states that a network’s value is proportional to the square of the number of its users. One critical insight: bitcoin is the first store of value in history in which its supply is entirely unaffected by an increase in its demand. The ultimate supply of bitcoin is fundamentally limited by the design of the system itself and cannot be increased regardless of its value or the level of demand. While far from perfect, gold is bitcoin’s closest real-world analogy. Bitcoin’s supply growth, which asymptotically approaches 0% over time, is now down to 1.3% annually, on par with the annual growth in gold supply. These positive network fundamentals are set against the backdrop of automatically dwindling new bitcoin supply and an ultimate cap of 21M bitcoin. This development supports our view, and direct experience at NYDIG, that bitcoin is being increasingly adopted by institutional investors. We also see record highs in the number of addresses that control large bitcoin balances, which we define as at least 1,000 bitcoins. Regarding supply, we show average investor holding periods rising, with the percentage of total bitcoin supply held for at least one year recently hitting an all-time high. Increasing fundamental demand combined with a fixed supply and automatically declining supply growth makes a compelling case for bitcoin as an alternative investment for institutional investors.Įxamining addresses that hold bitcoin balances and daily active addresses, we show that network adoption and network usage are each growing.
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