Metcalfe and The Future of Bitcoin

With the help of a formula by Robert Metcalfe, Tom Lee claims to have found a way to explain the price fluctuations of bitcoin. He compares Bitcoin to a social network whose value increases with the number of users.

The formula is based on the Metcalfe formula, which states that the value of a network is proportional to the root of the number of users in a network.

Up to now, bitcoin has been traded at a price above the formula. FundStrat is optimistic in his analyses, but believes that a correction of the share price, as it currently seems to take place, is realistic.

“If you use a very simple formula to calculate the value of Bitcoin as a square function of the number of users and the average transaction value, you can explain 94% of the movements of Bitcoin within the last 4 years “, says
Tom Lee, co-founder of FundStrat, a financial research institute in an interview with business insiders.

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