Bitcoin’s price-to-earnings ratio metric proves price can go a lot higher
For those wondering whether bitcoin is in a bubble, the crypto-converts have a answer: it’s not. The price, they say, can go much higher. The answer is not all that surprising, or new. But recently bitcoiners have latched onto a metric they contend proves their sky-high predictions are not based solely on blind belief or an ideological bent against organised governments or fear of a massive financial collapse. The metric is called the network value-to-transaction ratio, or NVT. Some have dubbed it bitcoin’s price-to-earnings ratio. And, at least in the community, it’s becoming something of an industry standard valuation metric. At least two websites are devoted to showing the daily value of bitcoin’s NVT, which, as of Wednesday, was 119. That’s above its historical average, which in bitcoin land is about eight years of data, of 87, but well below its peak of well above 400. Bitcoin, by this analysis, still has room to run. The question of whether bitcoin is in a bubble has come up b...
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