dailyhodl.com
A former Bloomberg analyst says that fundamental blockchain analysis points toward the notion that crypto is headed towards mainstream adoption.
In a new thread, Jamie Coutts tells his 10,600 followers on the social media platform X that Metcalfe’s Law – which states that the value of a communications network is proportional to the square of the number of connected users in its system – is at the heart of the new analytics method.
According to Coutts, the data shows that Bitcoin’s user base grew in 2022 and 2023 despite dips in $BTC’s price, signaling an upward trajectory of mainstream adoption.
“Blockchain fundamental analysis is a new field, an open design space for the intellectually curious. But at its core are the long-standing, well-accepted principles of network theory, or Metcalfe’s Law, which states the value of a network is proportional to the number of nodes/users and interconnections.
Daily Active Users (DAUs) for smart contract (SCP) blockchains keep hitting new ATHs (all-time highs) – currently 6.34 million (30-day average). Meanwhile, the aggregate market cap for these networks is still 40% below the 2021 peak.
Unlike previous bear markets, more users came into the ecosystem in 2022/23 despite wicked drawdowns in prices. This is the global adoption of crypto on a trajectory to mainstream adoption. This is the signal. Be the network, own the network.”
Earlier this week, Coutts said that one on-chain indicator suggests Bitcoin ($BTC) could reach a minimum price target of $100,000 by 2025.
The analyst noted that he’s been keeping an eye on Bitcoin’s MVRV (market value to realized value) Z-score, which aims to measure whether $BTC is “undervalued” or “overvalued” by comparing its market value to its realized value.
“Bitcoin is now ahead of [the] previous two cycles on price performance. MVRV Z-score topped above six last cycle. If cycle moderation continues, then 4-5 standard deviations seems fair this cycle, implying a $BTC price of $100,000 [minimum] by 2025.”
Bitcoin is trading for $61,660 at time of writing, a 8.5% increase during the last 24 hours.
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