This metric looks at the supply side of Bitcoin's economy - bitcoin miners and their revenue.
It explores market cycles from a mining revenue perspective. Bitcoin miners are sometimes referred to as compulsory sellers due to their need to cover fixed costs of mining hardware in a market where price is extremely volatile. The revenue they generate can therefore influence price over time.
The Puell Multiple is calculated by dividing the daily issuance value of bitcoins (in USD) by the 365-day moving average of daily issuance value.
How It Can Be Used
There are periods of time where the value of bitcoins being mined and entering the ecosystem is too great or too little relative to historical norms.
Understanding these periods of time can be beneficial to the strategic Bitcoin investor.
The chart above highlights periods where the value of Bitcoin's issued on a daily basis has historically been extremely low (Puell Multiple entering green box), which produced outsized returns for Bitcoin investors who bought Bitcoin here. It also shows periods where the daily issuance value was extremely high (Puell Multiple entering red box), providing advantageous profit-taking for Bitcoin investors who sold here.