What is the Bitcoin Puell Multiple and Why Does It Matter for Bitcoin Investments?

The Bitcoin Puell Multiple is a market metric that measures the ratio of the daily value of newly issued Bitcoin to the 365-day moving average of the daily value of newly issued Bitcoin. It is calculated by dividing the daily issuance value of Bitcoin (in USD) by the 365-day moving average of the daily issuance value (also in USD).

The Puell Multiple can be used to assess the profitability of Bitcoin mining. A high Puell Multiple indicates that miners are earning a lot of money from mining Bitcoin, while a low Puell Multiple indicates that miners are earning less money from mining Bitcoin.

The Puell Multiple can also be used to predict future price movements of Bitcoin. In general, a high Puell Multiple indicates that there is a lot of sell pressure in the market, as miners are selling their Bitcoin to cover their costs. A low Puell Multiple, on the other hand, indicates that there is less sell pressure in the market, as miners are not under as much pressure to sell their Bitcoin.

The Puell Multiple has been shown to be a reliable indicator of future price movements of Bitcoin. For example, the Puell Multiple reached a peak of 13.5 in December 2017, just before the Bitcoin price peaked at $20,000. The Puell Multiple then declined sharply to 0.3 in December 2018, just before the Bitcoin price bottomed out at $3,122.

• Year Date Puell Multiple
  2017 December 15 13.5
  2018 December 15 0.3
  2019 December 15 2.4
  2020 December 15 4.2
  2021 December 15 5.7
  2022 December 15 4
  2023 July 15 2.5

As you can see, the Puell Multiple has been on a downward trend since 2017. This suggests that the profitability of Bitcoin mining has been declining. However, the Puell Multiple has recently started to increase, which could be a sign that the profitability of Bitcoin mining is starting to improve.

Overall, the Puell Multiple is a useful tool. It will be exciting to see if the trend continues and we see the Puell Multiple continue to play out like a clock!

Sources

info

1. coindcx.com/blog/cryptocurrency/how-to-use-puell-multiple/