New Adamant Capital Report: Bitcoin is Primarily a Store of Value; Payments are Secondary

Back on February 20, Adamant Capital discussed Bitcoin (BTC) and how it can be used around the world. In a recent blog post, the company provides information regarding the fundamental drivers behind Bitcoin price movements. The article was written by Tuur Demeester, Tomas Blummer and Michiel Lescrauwaet.

They start the blog post by suggesting two new ways to measure changes in Bitcoin saving behavior.

  • Relative Unrealized Profit/Loss Ratio (investor sentiment)
  • HODLer Position Change (insider buying/selling)

At the same time, they’ve introduced the liveliness measure that reflects the extent to which a cryptocurrency is used by savers.

These are just new tools to assess the value of Bitcoin, the most popular digital currency in the market. There are other companies and investors that have created more complex measures of valuation for consumers, merchants and investors as well.

According to a recent tweet post written by Tuur Demeester making reference to the blog post, he says that “a Bitcoin transaction is the strongest expression of optionality / private key control,” which is always a realization of value.

About it, the report says:

“Every time a bitcoin moves on the blockchain, its market value is realized. The owner was aware of its value and affirmed his control over it at the point of the move. It doesn’t matter if the transaction represents the owner sending the coins to somebody else (a sale or gif), or if it is an act of self-dealing.”

As Demeester explains, every Bitcoin’s realized value is the price that it had when it moved the last time. He says that Bitcoin’s total Unrealized Profit/Loss is calculated by subtracting all the total realized values from the total realizable value. Furthermore, it is also possible to express Unrealized P&L in a relative way as a percentage of the market capitalization. In this way, it is possible to approximate investors’ sentiment.

After this concept, they start discussing the concept of Liveliness. This is a new quantitative measure that provides insights to shifts in saving behavior. It shows that the larger the number of older coins moving on the blockchain, the higher its Liveliness.

According to Demeester, this is a unique feature in the investment world. With it, it is possible to understand the net position change of those storing coins (HODLers). This measure is similar to insider buying and selling.

Demeester mentioned that these metrics will tell more about Bitcoin’s emotional state and how whales are moving their pieces in the market. They will also give more tools to compare long-term investor activity.


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