It‘ll be a short note from me today. I’m currently working with Charlie Morris over at The Fleet Street Letter on a new project: a comprehensive guide to valuing Bitcoin, for speculative or long term investing purposes.
The Bitcoin market has been an interesting place to visit recently. Last week, the market rallied almost $2,000 in 12 hours for seemingly no reason. Transactions over the Bitcoin network, the blockchain, weren’t huge around the time: the largest activity during that rally was a quarter billion dollars being transferred over half an hour. That’s all changed now though: over a billion bucks were transacted over the network between 9 and 10 pm last night.
Blue bars at the bottom indicate the network transactions over the blockchain, with the BTC price in green and red candles
Source:ByteTree
It’s possible that before the sudden rally, a larger Bitcoin transaction took place “off-chain”, and so show didn’t show up on the blockchain. This is a transaction similar to the exchange of a key to a locker full of gold, rather than physically transferring the gold by hand.
The key in this case, would be a short line of code (possibly printed on paper) and the gold is a record on a shared digital ledger that a certain number of Bitcoin belongs to that code. If this seems like a foreign concept, wait until you see the various methods Charlie uses to measure Bitcoin’s value…
Charlie’s brain goes at a hundred miles an hour, so it can be tricky to keep up with him sometimes. It’s almost like you’re playing chess and he can imagine several more moves into the future than you can. But if you can keep with him, and get your head around his valuation models and complex investing strategy, the insight he brings to the game is like no other.
Back tomorrow,
Boaz Shoshan
Editor, Capital & Conflict
Category: Market updates