ByteTree’s Bitcoin Valuation Model

Every time someone initiates a Bitcoin transaction, they contribute to the network. According to ByteTree data, last week there were 2.2 million transactions that saw $55bn change hands. At that rate, expect to see over $2 trillion change hands over the Bitcoin Network this year, another record high. Given Bitcoin’s main purpose is to transfer value over the internet, it stands to reason that the amount of value transferred (transaction value TV) is closely linked to the total value of the network (network value NV).

Network value is closely linked to transaction value

Source: ByteTree.com. NV (black), TV (green), 12-week smoothed line (red).
  • The 12-week TV lags the 1 week TV. When they cross, they agree.
  • From 2015 to June 2017, the NV appeared to trade below TV.
  • Post 2018, NV is more in line with TV.

ByteTree’s NVT ratio

Source: ByteTree.com. NVT 1-week transaction value, 2013 to date.
  • This settled down in 2015 when the one-week NVT fell below the three-year median.
  • Post-2018 the median has been rising.
  • Today’s reading is 10.

The Bitcoin premium using one-week transaction value

Source: ByteTree.com. 1-week Premium Value (green), Bitcoin price $ (black), 2014 to date.

The Bitcoin premium using 12-week transaction value

Source: ByteTree.com. 12-week Premium Value (red), Bitcoin price $ (black), 2014 to date.

Bitcoin transaction value — past quarter

Source: ByteTree.com; Featured Charts. Bitcoin total transaction value, 1-week cumulative rolling, for the past quarter to date.
Source: ByteTree.com; Valuation. Fair Value and NVT-BT is tracked in real-time and displayed under the “Valuation” tab on the ByteTree Terminal.

Applied data for digital asset investors. ByteTree provides real-time data, fundamentals, technical and deep blockchain market analysis for Bitcoin, and more.

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