On the question of what Bitcoin is exactly, have 10 different people in most cases 100 different answers. This is no wonder, because the digital Asset is combined with the Blockchain technology is a “novel” phenomenon, which is just 10 years old. In Bitcoin,” the digital Asset “means, as well as the underlying payment network. Apart from the disruptive Potential of interest to the majority of the Crypto-Fans, very for the Bitcoin exchange rate.The Bitcoin exchange rate due to the still-small market, huge fluctuations (volatility) and makes BTC for speculation very interesting. It would be nice so if you could say the price of BTC before. Unlike in the case of shares, but similarly as in the case of Gold, is a “fair price” for a digital Taler difficult to determine. Predict whether the Asset is over – rated or under, are so open to interpretation. The network activity is the solution?
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Bitcoin exchange rate, and Stock-to-Flow
In the analysis of stock prices analysts draw is known to have a variety of indicators. An example of this is the p / e ratio (price-to-earnings ratio). This number sets the share price and the profit of the company per share as a ratio. Furthermore, stock exchanges, speculators are paying a variety of fundamental data of the company such as balance sheet and profit and sales development.In the case of Assets that do not create a Cash Flow, but only as a “Store of Value” or “Medium of Exchange” to serve, not all of these indicators most of the time. So it’s no wonder that the Crypto-Fans have to drag other indicators to see if the current Bitcoin price is justified or not. A possibility of the Stock-to-Flow model, which we have already explained a few days ago. In short, this model (similar to the p / e ratio) inventory (Stock) of an asset and its inflow (Flow) into the relationship.
Bitcoin exchange rate = value of the network = network activity?
In addition to the Stock-to-Flow model, there is a more technical option to the Bitcoin to view rates. As mentioned above, this is in the case of Bitcoin is not only an Asset, but also to a (payment) network. As in the case of Facebook and co. the value of a network increases with the number of its users, and the degree of utilization. The more people and companies on the network to participate, the more valuable it is, that is to say increases the Bitcoin exchange rate.However, as the value of the Bitcoin network be measured? There are a number of indicators. The market capitalization plays an important role, because it indicates the total value of all outstanding Coins. In addition, one could say that the activity plays a more crucial role. Because not only the number of users, but also the frequency of use has an influence on the activity in the network and thus its value.The best and safest stock market choose for you to opt for the right provider is not always easy. Therefore, we recommend that you take a look at our Bitcoin brokers & exchanges to throw a comparison. Trading on the safest and best exchanges in the world! For Comparison
Chief Investment Officer, looks like a clear connection to Bitcoin exchange rate
In an Interview with “Venture Coinist”, which was published on Monday, confirmed Travis Kling, Chief Investment Officer at Ikigai Asset Management is exactly this connection. He says that in the same way as for equities, the correlation between the price of a stock, and the sales and earnings per share, there is also a connection between the network value and the network activity. In another Interview the Asset Manager even goes so far, and sets the two values equal to:
The network value should be a function of the network activity.
Indicators for network activity
However, as the network activity to measure accurately? For this purpose, there are 3 popular indicators:the number of Bitcoin addresses (an indicator of number of users)Hash Rate (indicator for the number and strength of the Miner)number of transactions (an indicator of frequency of use)Particularly, the Hash Rate is attributed to a strong correlation with the Bitcoin price. This is, however, not clear whether it is only a correlation, or even causality. It is interesting to note, however, that the Hash Rate has been increasing for years and even now, in ever-new heights investigating possible. But in the end, the Hash should follow the Rate of the Bitcoin exchange rate and not the other way around.Who wants to listen to the opinion of some analysts Believe that could come to the conclusion that it is only a matter of time until the Bitcoin exchange rate the flight of the Hash Rate adjusts again. But as so often is the will only show the future, because from the past, the future cannot always be predicted.
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