ARK Invest and Glassnode have unveiled a new system for measuring the fundamentals of the first cryptocurrency to analyze the real economic weight of each BTC on the Bitcoin network.
David Puell, Blockchain and Market Researcher at ARK Invest, and James Check, Lead Blockchain Researcher at Glassnode, have developed a new tool for Bitcoin on-chain analytics. It’s called Cointime Economics, which is designed to improve the assessment of the first cryptocurrency’s economic fundamentals and enables the modeling of supply and demand dynamics.
According to the developers, the system represents a new analytical tool for measuring the activity of BTC users, which will complement the Unspent Transaction Output (UTXO) models. The analysis is based on the information value of each BTC, and this value is estimated by analysts depending on its movement between wallets. Puell and Check claim that the movement of BTC coins, which have been static for a long time, has a considerable impact on the entire crypto market.
Thus, Cointime Economics derived a special metric, coinblock, which is determined by multiplying the amount of BTC by the number of blocks created while the coins remain unmoved. Since the Bitcoin network generates a block every 10 minutes on average, 1 BTC creates approximately 144 coinblocks per day. When BTC is moved, the coinblocks generated by storage are destroyed. The number of coinblocks destroyed during a transaction is the central value for measuring the impact on supply and demand dynamics.
However, the new tool doesn’t take into account the impact of lost BTC. Puell and Check argue that although such coins have the highest coinblock values, the probability of their movement is statistically too small to be considered in forecasting.
Analysts have revealed that BTC quotes are virtually unaffected by most macroeconomic factors.
