@cryptovestor, glad you're putting videos up on youtube again! Really glad you are thinking about the VALUE of bitcoin.
Stocks have a PE ratio. One of many different metrics developed to help investors determine the value of the stock.
Not sure if you ever noticed anything I've written about "confusing price and value" but your comments today indicate you are aware of how it happens.
In the long run we need crypto value metrics and I'll propose a generic term of 'PV ratio' or just PV for short. PV means Price to Value ratio, since cryptos don't have Earnings.
You mentioned Burniske employing the equation of exchange. That would be a PV-sub-ee metric. What would that be today?
Then you mentioned the cost of mining argument and poked some valid holes in it, but hey IMHO anything is better than nothing which is what we've got now. So I'll propose a PV-sub-mc (for mining cost) as potentially useful value metric. And conveniently ignore the difficulties caused by different power costs as an inconvenient detail to be resolved later. And also ignore the metric can't be applied to cryptos that can't be mined.
Thanks for shining your insight on a question near and dear to my avaricious heart.
Currently crypto investing is the wild wild west, but it won't always be so. Some useful and usable metrics will help increase the size of the crypto market.
Regards,
Rick
My current projections of a bullish 12/26 EMA cross for BTC, ETH, and LTC show BTC in 3 days, ETH in 6 days, and LTC in 12 days. Caveats of course YMMV and all attempts to predict the future are subject to change without warning. Edit note: While getting ready to pull the trigger on BTC in a couple of days I found an error in my linear projection formula. about 4 hours after my original post I corrected the estimates shown above by adding 1 day to each.
The P/E ratio of cryptocurrencies is supposed to be NVT ratio, which also has flaws but is definitely the closest we have for relative valuation purposes. Thanks for your comment as always Rick.
I had to google to find out what the NVT is. Thanks much for ameliorating my ignorance yet again. When I read Woo's definition with a 28 day moving average that includes 14 forward looking values it was a WTF moment. That definition is useless if you are trying to consider the NVT today!
Kalichkin's NVT using a 90 DMA is better, but any method is suspect when the real daily transaction value is a moving target that nobody can be sure about. (My caustic interpretation of Justin Chan's excellent DDI article, http://www.datadriveninvestor.com/2018/03/15/the-network-value-to-transactions-nvt-ratio-a-breakthrough-for-cryptocurrency-valuation/)
Is any exchange including NVT charting in their customer charting offerings? My gut says probably not, but I have no experience outside of gdax. Their charting offerings are by no standard impressive, AKA unimpressive by any standard.
Random thought: If NVT is a potentially valuable metric, could the Bitcoin blockchain be modified to include a REAL block transaction value value that could be summed on a daily basis to provide a REAL Daily Transaction Value value. Are you aware of anybody thinking/proposing such a thing within the Bitcoin development communities? Or is the idea too circular for consideration?
I'm taking it as a sign from the universe that you're posting videos again because I've been out of crypto for about 50+ days and getting ready to dive back in within a few days, maybe.
I just finished backtesting my rule set from 1/30/17 thru 5/16/18 using a worst entry/worst exit method after each 12/26 EMA crossover. This long only scheme produced a 467% return over that timeframe, though the last two entry/exit roundtrips returned -23% and -2% losses. I would be ecstatic to achieve even a quarter of those results in the next 18 months, so I believe I'll play this hand.
Regards,
Rick
hey can you review ALQO? thanks
@makesushi, I could review ALQO but nobody would care what I think and I know nothing about ALQO. I think you meant to reply to @cryptovestor and I am but a humble acolyte and part time curmudgeon. :-)
Peace,
Rick