Bitcoin (BTC) is Still Up 14% in Q3 2020 14

Bitcoin (BTC) is Still Up 14% in Q3 2020

Quick take:

  • Despite a rough few days, Bitcoin is still in profits for Q3 2020
  • July 1st found Bitcoin trading at roughly $9,100
  • BTC is currently trading above the $10,300 support level

In the last 24 hours, Bitcoin has gone below the $10,000 psychological price on two occasions. The first time was before yesterday’s daily close when BTC briefly traded at $9,950 – Binance rate. The second time was today around 10:50 am NYC time when Bitcoin fell to as low as $9,890. This means that Bitcoin has partially filled the CME gap created in July that went as low as $9,700. What remains to be seen, is whether there will be a third attempt, in the near future, to fill it completely.

Bitcoin (BTC) is Still Up 14% in Q3 2020

Setting aside Bitcoin’s crash from $12k to $9,900 levels that happened this week, and looking at BTC’s performance in Q3, it can be observed that the King of Crypto is still up 14.725% for the quarter.

On July 1st, Bitcoin’s average price was $9,100. At the time of writing, BTC is trading at $10,440. This means that anyone who bought Bitcoin in early July is still a happy investor.

Bitcoin’s profitability in the third quarter of 2020 was also captured by the team at Unfolded via the following tweet.

$10,218 is Bitcoin’s Lowest Value Forward

Also worth mentioning is that in an August 30th tweet, the team at Cane Island Alternative Investors estimated that $10,200 was Bitcoin’s lowest price forward.

This value of $10,200 was attained by using Metcalfe’s law on the Bitcoin network. The process of calculating this value is summarized in the abstract section (below) of a paper written by Timothy Peterson that is available online.

Bitcoin is modeled as a token digital currency, a medium of exchange with no intrinsic value that is transacted within a defined electronic network. Per Metcalfe’s law, the value of a network is a function of the number of pairs transactions possible, and is proportional to n-squared.

A Gompertz curve is used to model the inflationary effects associated with the creation of new bitcoin. The result is a parsimonious model of supply (number of bitcoins) and demand (number of bitcoin wallets), with the conclusion bitcoin’s price fits Metcalfe’s law exceptionally well. Metcalfe’s law is used to investigate Gandal’s [2018] assertion of price manipulation in the Bitcoin ecosystem during 2013-2014.