Metcalf’s Law Suggests ETH May Be Gearing for a Parabolic Advance

Must Read

Harmony’s $100M Hack Was Due to a Compromised Multi-Sig Scheme, Says Analyst

Harmony’s Multi-Sig Exploited Polygon’s CSO Says, Harmony Protocol’s Founder Found Evidence That ‘Private Keys Were Compromised’

Uniswap Set To Add NFTs To Its Product Lineup With Latest Acquisition

On Tuesday, a popular crypto start-up and founders of a leading decentralized exchange of the name Uniswap...

Yuga Labs vs. Ryder Ripps: Decoding the impact of the lawsuit on the performance of ‘Apes’

Yuga Labs is the limelight again. However, this time around the NFT giant announced that it has...

IN BRIEF

  • Amidst numerous bullish pointers, ethereum prices seem to be finally responding.
  • A macro economist suggests that Metcalf’s Law has correctly predicted the performance of bitcoin and Facebook.
  • According to this Law, ethereum is next in line for a significant rally above $20,000.

Various metrics have been pointing to a mispricing of Ethereum in recent times. Adding to the growing list of these pointers is Metcalf’s Law.

ETH and BTC Correlation Begin to Break Away

Over the past few months, ETH and BTC price action have maintained a sharp correspondence. The latter has mostly been in the spotlight.

Investors and market participants showered their attention on Bitcoin in 2020. The price of the pioneer cryptocurrency broke out to new all-time highs above $40,000. This action has not gone well for most altcoins, which have bled in valuation against BTC. 

As the mammoth cryptocurrency loses steam, this may mean the market is giving way to Ethereum. ETH appears to have begun its journey to new price levels.

ETH vs BTC | Source: TradingView

Metcalf’s Law Suggests an Exponential Growth for Ethereum

Indicators show that the number of ethereum transactions are spiking. The recent exchange supply shock has also reached the lowest point since 2018.

According to an article by macroeconomist and statistician D. H. Taylor, Metcalf’s law just added credence to the bullish thesis. He explains that prices may soar above $20,000.

Metcalf’s Law states that the utility of a network is proportional to the number of users of the network. This utility represents a square function, often represented as this: Utility = n2

This implies that using mathematical principles, the rate of increase of any network can be mapped as a square of its userbase. An illustration further explaining Metcalf’s Law shows the exponential effect of adding more telephones creates independent connections to each other at the same time.

Source: WikiPedia

Two telephones can create just one, whereas with five telephones, we could have ten connections, and with 12, 66 connections.

This model, which has been applied to other cases, has proven true for both Bitcoin and Facebook. It reveals the inherent value that could be created with the growth of users on any network. The principles point to a massive room for the increase in the ethereum price.

The 2017 Bull Run in Retrospect

Referring to the previous bull cycle, a major rally is usually preceded by bullish bitcoin price action and consolidation. After this, the main alt boom begins. 

As ethereum moves to break its previous all-time high, the euphoria seems to be building up as retail investors jump into the market. Only time will tell whether or not history will repeat.

Source: https://beincrypto.com

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

Latest News

Harmony’s $100M Hack Was Due to a Compromised Multi-Sig Scheme, Says Analyst

Harmony’s Multi-Sig Exploited Polygon’s CSO Says, Harmony Protocol’s Founder Found Evidence That ‘Private Keys Were Compromised’

Uniswap Set To Add NFTs To Its Product Lineup With Latest Acquisition

On Tuesday, a popular crypto start-up and founders of a leading decentralized exchange of the name Uniswap announced the acquisition of Genie,...

Yuga Labs vs. Ryder Ripps: Decoding the impact of the lawsuit on the performance of ‘Apes’

Yuga Labs is the limelight again. However, this time around the NFT giant announced that it has filed a lawsuit against old...

Anonymous vows to bring Do Kwon’s ‘crimes’ to light

Hacktivist group Anonymous has pledged to “make sure” Terra co-founder Do Kwon is “brought to justice as soon as possible” in regard...

SEC requests comments on the guidelines for ICO portals

To avoid conflicts of interest and clarify the rules of outsourcing, the Securities and Exchange Commission (SEC) asks the public for feedback...
- Advertisement -

More Articles Like This