NEW YORK, Oct 01, 2020 (GLOBE NEWSWIRE) – ByteTree today, in partnership with Bitstamp, released a report examining the underlying factors that determine the price of Bitcoin Bitcoin value driver. The report is based on information from ByteTree’s extensive dataset with the aim of finding out what keeps Bitcoin at the forefront in the crypto markets today and in the future. Along the way, novel approaches to the valuation of Bitcoin are presented and some common narratives are exposed that appear valid on the surface, but fail on closer inspection.
In general, the report shows that the demand side is the main driver of Bitcoin’s value and that the cryptocurrency shows all signs of risk to growth. The highlights of the detailed report include:
1. While Bitcoin generally does not correlate with the stock market, it does show a significant correlation with certain (riskier) groups of stocks and the real estate market.
2. Bitcoin and gold complement each other to a large extent in a portfolio that should be constantly rebalanced. When it comes to investing, Bitcoin is the opposite of gold.
3. The activity of the miners follows the price and not the other way around. Strong sales pressure from miners signals a strong market.
4. Debunking the stock-to-flow model and presenting the network demand model as an innovative way of assessing the value of Bitcoin.
5. Multiple options: Scale the Lightning network and merge Bitcoin with DeFi to enable novel use cases for the oldest cryptocurrency.
“There are so many stories floating around in crypto that the noise sometimes drowns out the central value drivers at work below the surface,” said Miha Grčar, Global Head of Business Development at Bitstamp. “Our aim with this report was to take a closer look, to find out what fundamentally influences the price of Bitcoin, and to provide novel models for evaluating the market. This is not about hype and narrative, but about real insights that can help investors build a solid thesis. “
The report argues that Bitcoin is an inherently “Internet economy”, the success of which is directly related to the level of activity and the size of the user base on the network, and examines the importance of network effects to the largest cryptocurrency. It lists some of the primary metrics that ByteTree tracks and how they can be applied to a relative strength model for the Bitcoin economy. It also looks at the underlying technological framework of Bitcoin and suggests a number of ways the asset can move forward from a utility standpoint.
“Our goal is to use well-founded data to gain new views on how the Bitcoin economy works and to present reliable strategies for traders and investors in this area. The support of a trustworthy and reliable exchange like Bitstamp is essential ”, said James Bennett, CEO of Crypto Composite, the parent company of ByteTree. “Bitcoin is an internet native asset and has specific properties that differ from traditional assets. However, we can observe correlations between Bitcoin and assets and instruments such as gold, stocks or bonds.”
This report is just one of a series that Bitstamp has published together with a number of research partners to bring transparency and credibility to the crypto space. Consistent with their goal of achieving freedom of exchange, the Pioneer Exchange believes that gathering in-depth knowledge and expert opinions about the space and freely sharing those insights with the community will have positive long-term effects and help build the bridge between crypto and crypto to strengthen traditional finances.
A full copy of the report is available at: https://www.bitstamp.net/institutional-trading/?utm_source=press_release&utm_medium=post&utm_campaign=Bytetree_Report#marketing-insights.
Bitstamp is the world’s longest running cryptocurrency exchange and has been supporting investors, traders and leading financial institutions since 2011. With a proven track record, state-of-the-art market infrastructure and a commitment to personal service with a human touch, Bitstamps is a secure and reliable trading venue trusted by over four million customers worldwide. Whether via the intuitive web platform and the mobile app or via industry-leading APIs – with Bitstamp, Crypto enters the financial world.
More information is available at www.bitstamp.net.
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The ByteTree Group provides applied data, research, asset management and advisory services to digital asset investors. ByteTree pioneered the network demand approach to investing in this asset class, measuring the health of the Bitcoin economy using data streamed directly from the ByteTree terminal. The terminal enables investors to monitor price, volume and a variety of on-chain metrics in real time or to download data via the API for customized analysis. ByteTree believes that decentralized peer-to-peer networks will play an important role in the economies of the future and will support a fundamental approach to their analysis as they mature.