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: https://www.theinvestorspodcast.com/bitcoin-mayer-multiple/

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.

Resources
@TIPMayerMultiple twitter account tweets out the current Mayer Multiple value
https://mayermultiple.info/ provides charts of the Mayer Multiple
https://www.theinvestorspodcast.com/episodes/trace-mayer-bitcoin/ TIP interview with Travis Meyer