Analyst Matt Rowe has compared the dynamics of Mayer Multiple with Bitcoin’s historical returns. He concludes that buying the cryptocurrency at current levels could yield ‘x’ returns for patient investors.
#Bitcoin Mayer Multiple is: Price / 200 Day Simple Moving Average (SMA) of Price.
It’s currently at levels we haven’t seen since 2011 and 2015 bear markets.
So if we bought here, and held for N days, what kinds of (historical) returns can we expect?
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— Matt Rowe (@mattrowsboats) June 18, 2022
The Mayer Multiple indicator has fallen to levels seen in 2011 and 2015. This points to a substantial gap between the current price of digital gold and the values of the 200-day moving average. The latter is widely seen as a rough boundary between bullish and bearish markets.
According to Rowe, if you buy Bitcoin at $1,000 above the current Mayer Multiple level and hold for 60 days, the ending amount would be between $1,000 (breakeven) and $2,300.
🍊 60 Days from now, we have historically seen returns between 1x (breakeven-ish), and 2.3x.
So if you invested $1,000 now, in 60 days you have good historical odds of potentially having between $1,000 and $2,300 (is how to think about this).
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— Matt Rowe (@mattrowsboats) June 18, 2022
All else equal, holding the asset for 180 days has historically yielded between 1.9x and 50x. In other words, a $1,000 investment would be worth between $1,800 and $50,000.
🍊 180 Days from now, we have historically seen returns between 1.9x , and 50x. 😳
So if you invested $1,000 now, in 180 days you have good historical odds of potentially having between $1,800 and $50,000.
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— Matt Rowe (@mattrowsboats) June 18, 2022
A similar investment over a year, according to Rowe, would amount to between $50 000 and $250 000.
🍊 365 Days from now, we have historically seen returns between 50x , and 250x. 😳😳😳
So if you invested $1,000 now, in 365 days you have good historical odds of having between $50,000 and $250,000.
4/7 pic.twitter.com/VEOpKm2VHq
— Matt Rowe (@mattrowsboats) June 18, 2022
The researcher stressed that the calculations are entirely based on historical performance, which does not guarantee similarly impressive results in the future.
“In the game, a macroeconomic recession has entered the game; this time things could be different,” noted Matt Rowe.
He added that he is bearish about the current market situation. However, over the long run the probability of Bitcoin’s growth is higher than in the near-term outlook.
Earlier, Galaxy Digital’s Mike Novogratz expressed the view that the driver of a new Bitcoin rally would be policy easing by the ФРС.
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