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General DiscussionBitcoin Mayer Multiple

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Moderator: Ultimatebtc

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Bitcoin Mayer Multiple

Postby Ultimatebtc » Sun Jan 21, 2018 11:04 am

The 200 Day Moving Average is: $6476

The average Mayer Multiple is 1.47 for the history of Bitcoin.

The multiple on 17 January 2018 is 1.78X. A higher multiple has historically happened 18% of the time. A price less than $15,543 would put the Mayer Multiple below 2.4X on 17 January 2018. A price of $9572 would put the price on the average multiple of 1.47X. The BTC price when this calculation was last conducted was $11,553 USD.
Mayer-Multiple-Histogram-17-JAN-2018.jpeg (31.91 KiB) Viewed 4129 times
The Mayer Multiple Since the Inception of Bitcoin
Bitcoin-Long-Term-Trend-Mayer-Multiple-17-JAN-2018.jpeg (45.01 KiB) Viewed 4129 times
Mayer-Multiple-17-JAN-2018-Frequency-Distribution.jpeg (86.66 KiB) Viewed 4129 times
The chart below was determined by a simulation. The simulation assumed a person had $100 to invest in Bitcoin everyday since inception. There was only 1 control variable – the Mayer Multiple. If the price was < x Mayer Multiple, then the individual would buy $100 worth of BTC. If the price was >= x Mayer Multiple, the person would accumulate fiat until the price dropped back below x. The various x multiples that were tested are listed on the x axis below. When the simulation was run for various Mayer Multiples, it produced various returns (displayed in BTC on the y axis of the chart below). The chart demonstrates that anything over a Mayer Multiple of 2.4X failed to produce better results. When a multiple was selected below 2.4X, the BTC buyer got dramatically worse results. But, it’s very important to note that a new entrant buying below a 2.4X threshold would have an easier time emotionally during the first few quarters of ownership. Please note, every time the Mayer Multiple has gone above the 2.4X line, it has returned below 1.5X. In our simulation, we did not hold cash until reaching 1.5X (instead, the model simply purchased more BTC once below the 2.4X threshold). If the simulation would have waited for repurchase below 1.5X (after movement above 2.4X was achieved), the results would have likely been better than depicted below. This, however, may or many not be indicative of how the market might perform in the future, so those enhanced results were not displayed.
Simulation.jpeg (39.13 KiB) Viewed 4129 times
The Intrinsic Value and Networking Effect
The graph below shows how the value of Bitcoin might increase exponentially. The graph is derived from Metcalfe’s law that states that the value of a telecommunications network (fax machines, telephones, etc.) is proportional to the square of the number of connected users of the system. Companies like Facebook and Tencent showed that Metcalfe’s law, originally presented in 1980, held for both.

94% of the price movements from 2013-2017 has been explained by this law.

Buy in fear. Sell in Greed.

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