Is Trading Bitcoin Possible using the Mayer Multiple

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The MayerMultiple is the current Bitcoin price divided by the 200 day moving average. Based upon statistical analysis of the multiple over the life of Bitcoin, Travis Mayer determined that the optimal time to buy Bitcoin would be when the multiple is below 2.4.

There is an article on The Investors Podcast website explaining how this number has been derived and showing both the historic Bitcoin value and Mayer Multiple graphically:

As this Mayer Multiple analysis is based upon historical information it will only work going forwards if the future dynamics of Bitcoin prices are consistent with the past. So as for all back-tested trading formulae there are no guarantees here that this will work going forward.

If I understand the article correctly, if regularly buying Bitcoin waiting until the Mayer Multiple is much lower than 2.4 would not be as profitable as piling in when its at 2.4. The theory being that over time there will be an underlying increase in value due to the network effect of increasing numbers of investors generating an increasing value.

I’m still not really convinced in Bitcoin as a store of value worthy of investment (see Bitcoin, is it here to stay?). However there has been profit made that has been missed by not being in Bitcoin, so if you are to trade (or god forbid invest) in bitcoin this might be a better indicator of when to buy than gut feel of guess work.

@TIPMayerMultiple twitter account tweets out the current Mayer Multiple value provides charts of the Mayer Multiple TIP interview with Travis Meyer

Why Tesla can do car insurance for less

Elon Musk recently announced that Tesla will be offering Tesla Car insurance. This could be more than just another step in the relentless drive toward vertical integration of all things to do with Tesla vehicles.

The notion of a car maker selling insurance has faced derision from analysts and observers as prominent as Warren Buffett, but Musk has said that Tesla can offer insurance “much more compelling than everything else out there.”

Jeremy C. Owens

What the analysts and critics appear to have missed, is that all these Tesla cars have 360 degree cameras and accelerometers constantly recording the state of the car and its situation. In the event of an accident this data would be available to Tesla Insurance to defend against paying out. Add in sentry mode then it not only covers damage to the vehicles whilst being driven, but also records incidents when parked.

The evidence provided by these cars would make resolution of liability very cost effective for Tesla, reducing the major cost of providing vehicle insurance. This gives Tesla a massive advantage over other insurance providers.

With the vehicle telemetry being constantly available to the insurer, there is an opportunity to have dynamic pricing of insurance based upon the vehicle location and the driving style. Once autonomous driving is proven and legalised, there will be another step change, where potentially manually driven miles would incur a surcharge on the insurance premium.

Although promised within a month back at the end of April Tesla insurance is still not out of the blocks, apparently waiting for the completion of a “small acquisition that we need to complete and a bit of software to write”. I suspect that insurance will be offered to the US market, and Europe and the UK may not be addressed in the short term.

New technology will disrupt, but it seems the US insurance business and the analysts are not really joining the dots and coming to grips with the new reality.