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In today’s Daily Dive we introduce the latest whitepaper from ARK Invest Bitcoin, “On-Chain Data: A Framework for Valuing Bitcoin”. The paper was written by Yassine Elmandjra, analyst at ARK Invest, and David Puell, on-chain analyst and market researcher. Both are leading analysts in the field with histories of exceptional work. We will summarize your current whitepaper and provide some deep dive resources to complement it.
TLDR: The aim of the whitepaper is to help investors analyze and value Bitcoin like other traditional assets. The paper highlights Bitcoin’s global real-time public ledger as a unique toolset and goes through some key on-chain metrics to understand them.
Elmandjra and Puell begin by dividing the on-chain data into three different levels: network status, buyer and seller behavior and asset valuation. Each layer is tailored to a different group of market participants.
The network health layer covers the monetary integrity, security and usage of the Bitcoin network. When evaluating the distribution of the address offer, the offer of addresses with less than 10 BTC has increased since 2013.
Transaction volume and speed are ways to measure the health of the network. The transaction volume is approximately $ 53 million per day. Annual pace bottomed out in April 2021, which could be due to investors diversifying into other cryptocurrency assets or as transaction activity shifted back down the chain.
For a deeper look at the network’s total transaction volume and the network’s efficiency, see The Daily Dive # 108 – Bitcoin: The Most Efficient Value Settlement Network.