Tiger Research has unveiled a new model for assessing Bitcoin's fair value, considering both market and macroeconomic factors.
Introduction to Bitcoin Valuation Model
Every asset has its price, including Bitcoin. The question 'What is the fair value of Bitcoin?' becomes relevant for investors. Unlike traditional asset markets, Bitcoin lacks a unified standard for valuation. Tiger Research addresses this challenge by offering a systematic approach based on blockchain data and institutional investor behavior.
Structure of the Tiger Valuation Model
The Tiger Valuation Model (TVM) consists of three steps: 1. Deriving a base price from investor behavior. 2. Applying a fundamental indicator multiplier based on Bitcoin's network activity. 3. Incorporating macroeconomic factors for the final valuation. The model accounts for the interplay between these components, allowing for a more precise market value assessment.
Application of the Model in Market Conditions
TVM enables the fair value of Bitcoin to be assessed in market contexts. For instance, in November 2022, during the crisis following the FTX bankruptcy, the TVM model predicted a Bitcoin value of $16,170, which was close to the actual price of $15,000. This underscores the model's effectiveness in high volatility situations.
Tiger Research's Tiger Valuation Model offers a new perspective on Bitcoin evaluation, integrating market sentiment data with macroeconomic conditions. This approach can aid investors in making more informed decisions.
