The Mayer Multiple was one of Bitcoin’s earlier models attempting to assess whether Bitcoin was in a bubble or not.
The thesis was that investors should continue acquiring Bitcoin up until the Mayer Multiple hit 2.4. After this level, it would be counterproductive to acquire more Bitcoin because it was “overvalued”.
Due to Bitcoin’s volatility over time however, the Mayer Multiple has become less useful as an indicator. As such, the Volatility Adjusted Mayer Multiple was created to account for the continued decline in Bitcoin’s price volatility over multiple cycles.
The Mayer Multiple is simply the price of Bitcoin divided by Bitcoin’s 200 Days moving average.
The Multiple was created by Trace Mayer as a way to accurately assess the historical nature of Bitcoin’s price movements.
No, the Mayer Multiple is not reliable as a forward looking indicator. However, the Mayer Multiple can be useful when utilized alongside other sentiment metrics when assessing the strength of the broader Bitcoin ecosystem.
This information is for educational purposes only. Any Information found on this site is not to be considered financial advice.
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