In previous Bull Markets, the MVRV ratio was one of the most reliable indicators of market tops.

It reached 3.96 in 2017 when Bitcoin flirted with $20k

MVRV-FF is currently at 1.96

If you believe history rhymes, this suggests we're not even close to the "euphoria" phase.
This is not investment advice. MVRV simply tracks how the overall market valuation (market cap) compares against everyone's "cost basis" (realized cap).

It spikes when market value is disproportionately higher than the value being moved on-chain.
You may notice that our MVRV figures are different.

That's because we use Free Float (FF) Market Cap instead of "total" Market Cap to determine market valuation.

FF better represents liquidity, since it removes supply that's unlikely to be in the market (e.g. BTC from 2009)
CoinMetric's @CelermajerB spearheaded this effort and wrote a post that's worth reading:…
Also make sure to check out the seminal post on MVRV by @kenoshaking and @MustStopMurad ⬇️…

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More from @LucasNuzzi

19 Nov
What is the main driver of this Bitcoin bull run?

Some speculate that Chinese miners haven't been able to sell their BTC because of a regulatory crackdown, and that has led to a "liquidity crunch"

Lots of anecdotes, but here is some empirical evidence ⬇️
1\ First, let's look at supply held by Mining Pools (red line) and individual Miners (green line).

As you can see, Pools (red) are not selling, but that's part of a long-term trend.

Individual miners (green) are selling, which goes against the narrative of a liquidity crunch.
2\ Now, let's look at miner outflows, which directly measures outgoing payments from both Pools (red) and Individual miners (green)

Again, the data invalidates that narrative. The recent spikes in funds Sent shows that miners are moving assets, which signals ability to sell.
Read 6 tweets
10 Aug
Auditing $ETH's supply is not the problem.

The problem is a json file in the Ethereum genesis block listing accounts that, from day 1, held a big portion of the monetary base.

That json file created long-lasting power structures.

It introduced governance.

It created leaders.
Bitcoin's equivalent to that .json file is a pseudonym that left the project after it launched, did not take a dime from it, and never returned.

That's beyond "fair launch". There were no precedents. No investors. Bitcoin was treated as a monopoly money in its early history.
The effects of being the first of its kind cannot, and will not, be replicated by any other crypto asset.

No investors, no industrialized mining, no wallets (beyond qt), absolutely no guarantee of success.

That decentralized Bitcoin's monetary base.
Read 6 tweets
13 May
Bitcoin's Epoch III has ended and it's truly remarkable to see how far it has come along since 2016.

Here are some @coinmetrics charts showcasing some of these accomplishments, taken from my presentation at #ConsensusDistributed 👇
Bitcoin settled the equivalent of *2.3 trillion USD* in Epoch III

For context, Visa+Mastercard Credit Cards settled 2.6T USD in the entire United States in 2017.

It's insane that a bootstrapped, 10yr old network settles values in the same magnitude of the largest CCs in the US.
The count of addresses holding over 100k sats (0.001 BTC) sats can be seen as a proxy for adoption, and on May 1st, the network reached an ATH with over 16M addresses holding at least 100k sats 🤯
Read 10 tweets
8 Apr
Bitcoin mining is evolving and it is -quite literally- a beautiful thing to see.

In this week’s SOTN, @karimhelpme showcases a fascinating type of #Bitcoin data, a distribution of nonces; the magical numbers miners compete to find.

Can you guess what these lines represent? 👇
These streaks have to do with the way S7 and S9 family of ASICs sample nonces; how they approach the cryptographic puzzle in mining.

Patterns began in late 2015, which coincides with the release of the S7. In 2016, when the S9 was released, they became narrower.
Want to get a sense of how miners are able to handle severe price shocks?

Extremely. Low. Operational. Costs.

We can assume that because usage of the S9 (considered by many as "obsolete") can still be observed in 2020, which is truly remarkable after 4 years.
Read 7 tweets
12 Dec 19
How to destroy a Proof-of-Stake network in 5 steps:
1) Increase intermediation between users and the PoS network via Staking-as-a-Service third parties -- it's happening already.

The custody of the majority of staked assets centralizes around a handful of custodians.
2) Promote "fluid collateral" - i.e. allow these third parties to create derivatives based on staked assets, like a Mortgage-Backed-Security.

Timelocks on staked assets become irrelevant and users can buy and sell them synthetically based on a) current price and b) PoS yield
Read 9 tweets
5 Dec 19
Challenge accepted 🤜🤛

Here's a decade in Bitcoin.

The most important decade of the 21st century? 🤔

Let's see 👇

2010 - Satoshi decentralizes Bitcoin by leaving his leadership role as its creator, and never again commenting on its development.

The Bitcoin community self-organizes, and begins to grow into new type of global institution.
2011 - The Silk Road showcases one of the biggest virtues of Bitcoin; it can't be censored or confiscated. A drawback? It's not private.

The Mt. Gox fiasco highlights infrastructural deficiencies; the lack of secure custody standards and the systemic risks imposed by exchanges.
Read 15 tweets

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