I think that shouldn’t be called a P/E ratio. A price to earnings ratio is the price of a share of an equity divided by the earnings per share. That looks like the market capitalization of Bitcoin divided by the principal value of all transactions, which is a very different metric. P/E ratio is a solid way to judge a specific equity. Unfortunately it’s not so solid with a value to volume ratio with Bitcoin.
It would be great if we could measure the velocity of money underlying Bitcoin as this is a key metric in understanding the value of any currency. The bottom line is, you can send very large amounts for the same fee as a tiny transfer. A big Bitcoin holder can send £100,000,000.00 worth of BTC in a single transaction back and forth 100+ times a day and pay a nominal sum of £0.50 each time. These sorts of tricks aren’t possible with a P/E ratio, unless the firm has dishonest accountants and auditors.
All that said, it’s not hopeless and there are ways to see Bitcoin’s value that are not so easy to game. Perhaps the biggest is to look at the fees paid on Bitcoin exchanges. This is a good way to see who is entering and exiting a specific cryptocurrency for any reason, including remittances, speculation or whatever else. Another good one is to simply look at the amount users are willing to pay in transaction fees to send a cryptocurrency.
To get a reliable “velocity of money” underlying Bitcoin would require knowledge of the identity of the transacting parties as well as the reason for their transactions, in order to remove “gaming” like I described above. This would unfortunately threaten the fungibility of Bitcoin and introduce all of the same frictions that make bank accounts with traditional currencies too expensive for half the planet. It’s a very complicated and nuanced situation, and there aren’t easy answers.
