Definition:
The Puell Multiple is a measure that compares the daily value (in USD) of coin issuance to the yearly average value of coin issuance.
For example: If the amount of Bitcoin mined on day 1 and day 2 were the same, but the price of Bitcoin on day 2 was higher than day 1, the Puell Multiple on day 2 would be greater than on day 1.
The Puell multiple is essentially a ratio that measures Bitcoins issuance value to its yearly average.
In the photo below, you can see the Puell multiple since 2012. One can note that over a long term time horizon, when the Puell multiple peaks, the price of Bitcoin is near a market top.
What to watch for:
Fair value: A Puell multiple value of 1 indicates that the current daily value of coin issuance is equal to the yearly average value of coin issuance, indicating fair value.
Overvalued: A Puell multiple value of around 3 or higher can indicate that the current daily value of coin issuance is very overvalued compared to the yearly average value of coin issuance. This can indicate that price is overvalued.
Undervalued: A Puell multiple value of around 0.5 or lower can indicate that the current daily value of coin issuance is very undervalued compared to the yearly average value of coin issuance. This can indicate that price is undervalued.
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