• Glassnode and Ark have developed a new framework for analyzing Bitcoin’s economic state, called Cointime Economics (CE).
• CE uses a new unit of time measurement called “Coinblocks” to more accurately account for the impact of lost coins on the market.
• The framework breaks down Bitcoin’s supply into two components: “Active” and “Vaulted” (inactive) supply.
Overview
Glassnode and Ark have developed a new framework for analyzing Bitcoin’s economic state, called Cointime Economics (CE). This framework will help increase the accuracy of on-chain analysis, which is often used to predict where Bitcoin’s price is heading.
Cointime Economics
CE uses a new unit of time measurement called „Coinblocks“ to more accurately account for the impact of lost coins on the market. Coinblocks are created every time a new Bitcoin block is added to the network, and as UTXOs are spent, Coinblocks within them are destroyed. This measurement breaks down Bitcoin’s supply into two components: „Active“ and „Vaulted“ (inactive) supply.
Benefits
The benefits of this framework include increased accuracy in on-chain analysis, allowing investors and traders to make better informed decisions when predicting where Bitcoin’s price is heading. Additionally, it provides an alternative method for measuring economic activity that does not focus solely on unspent transaction outputs (UTXOs).
Impact
The introduction of CE could have significant implications for how investors approach cryptocurrency markets in general. By providing a more accurate picture of economic activity in the crypto space, this tool could help traders make better decisions when making investment choices. Additionally, it could provide insight into long-term trends that may influence future prices or movements in the crypto market.
Conclusion
In conclusion, Glassnode and Ark have developed an innovative new tool that provides a much deeper understanding of Bitcoin’s economic state than traditional methods do. With its ability to measure both active and inactive coins, this tool can help investors gain greater clarity about what lies ahead in terms of price movements or other major shifts in the crypto market.