The founder of Adamant Capital, Tuur Demeester, has recently posted
The founder of Adamant Capital, Tuur Demeester, has recently posted an article on a blog explaining his opinions on the valuation of pioneering cryptocurrency Bitcoin.
Demeester, along with other members of the team actively working to keep Adamant Capital running, has a long-standing experience and understanding of how the financial world functions and how institutional investors make decisions. Having worked on these theories since 2011, Demeester has finally summed up a lot of his views in his blog post.
Published on the 20th of February, 2019, this blog post was posted from the Medium account of the Adamant Capital. In the article, he provided a detailed history of how Bitcoin has been valued over the years. In addition, he has come up with a new theory of how Bitcoin’s valuation may be determined with a greater degree of accuracy. This particular measure would account for how users save, and not just spend.
According to him investor sentiment is used to determine Relative Unrealised Sentiment. Apart from that, insider buying and selling is responsible for measuring HODLer Position Change.
The second metric has been explained in the blog in the following way:
“A blockchain where all the coins move within a single block has at that moment a Liveliness of 100%. A blockchain of two years old with no new block rewards, and where exactly one year ago all coins moved within a single block and no transactions moved since, would have a liveliness of 50%. In other words, the measure fluctuates relative to the total lifespan of the blockchain”.
The proposed model is expected to have another parameter. This would be the practice of assigning lower values to cryptocurrencies that have a high supply in the market just because they have been pre-mined by the developers.
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Another parameter of the model is the assignment of lower values to cryptocurrencies where there is a high quantity of coins which have been mined in advance. This is undoubtedly a rather interesting new model to value cryptocurrencies, something that is hotly debated in the crypto circuits today.