Metcalfe\u2019s Law was originally presented in 1980 by Robert Metcalfe, describing \u201ccompatible communicating devices\u201d. The theory was later refined in 1993 by George Gilder, referring to Ethernet. In its basic form, Metcalfe\u2019s Law states that the value of a telecommunications network is is proportional to the square of the number of connected users of the system (n\u00b2), or n(n \u2212 1)\/2, where n equals to number of nodes. The formula n(n \u2212 1)\/2 is proportional to n\u00b2 asymptotically. Metcalfe\u2019s Law has been successfully used for evaluating valuation of FAANG technology-related stocks and internet usage in general. Metcalfe\u2019s Law can be divided into original and generalized formulas: A. Original Metcalfe\u2019s Law: NV ~ n\u00b2. B. Generalized Metcalfe\u2019s Law: NV ~ n^1.5. Metcalfe and UTXO As mentioned above, Metcalfe\u2019s Law states that the value of a network is proportional to the square of the number of participants in the network. The following chart exploits a variant of the law with BTCUSD divided by n log n of the number of unspent transaction outputs (UTXO). Values are also scaled by 106. Metcalfe UTXO indicates close correlation between BTCUSD and network value during 2017 retail-based rally. However during 2014 upstream the indicator was decoupled from BTCUSD and thus significantly higher compared with price. During 2019\u20132020 Metcalfe UTXO would indicate BTCUSD being somewhat overpriced, however the two have been more correlated towards 2020. Metcalfe Ratio The following chart mirrors Metcalfe Ratio, the amount of active addresses of network (squared n\u00b2), and bitcoin\u2019s price (BTCUSD). Metcalfe Ratio shows both indicators rising in close correlation, Metcalfe Ratio is statistically more correlated with bitcoin\u2019s price than Metcalfe UTXO. We should especially focus on the recent rise of Metcalfe Ratio into mid-2019 levels and beyond, BTCUSD will likely follow shortly. Bitcoin NVT Network Value to Transactions Ratio (NVT) is a famous metric for potentially identifying when the USD price of a digital asset has exceeded or fallen below the value suggested by its underlying daily USD transaction volume. Bitcoin\u2019s NVT is calculated by dividing the Network Value (market cap) by the the daily USD volume transmitted through the blockchain. NVT and BTCUSD are extremely closely correlated over 2020 YTD, indicating \u201cfair price\u201d for bitcoin. Looking back, BTCUSD and NVT were heavily decoupled during 2017 and mid-2019 rallies. We should remember that NVT is limited by difficulty of calculating on-chain USD transaction volumes and different approaches at calculating NVT\u2019s denominator can lead to slightly different conclusions. Data sources: Bitcoin.com. Coin Metrics. dcresearch. Author: Timo Oinonen. Twitter. LinkedIn. Feedback \/ questions? Ping me -> email@example.com. Follow dcresearch on Twitter -> twitter.com\/dcresearch_io. dcresearch.io.