What Is the Puell Multiple? A Bitcoin Cycle Indicator Based on Miner Revenue
The Puell Multiple compares Bitcoin miners' daily revenue with its one-year average to estimate the market's place in a cycle. This guide explains what it measures, what extremes suggest and its limitations.
What is the Puell Multiple?
The Puell Multiple is an on-chain analysis indicator using daily miner revenue to estimate Bitcoin's cycle position. Proposed by analyst David Puell, it starts from a simple observation: miners earning much more than usual can suggest overheating, while much less can suggest depressed conditions.
Miners continually issue Bitcoin and sell some to cover costs, making them structural sellers. Their revenue therefore offers one clue to supply pressure and market sentiment.
How is it calculated?
The formula is relatively straightforward.
Puell Multiple = today's dollar value of newly issued coins ÷ the average daily issuance value over the past 365 days.
If today's miner revenue is $40 million and the one-year daily average is $20 million:
40 million ÷ 20 million = 2.0.
“Issuance value” means newly mined BTC multiplied by its price that day. A value near 1 means revenue is close to the annual average; above 1 means higher revenue, and below 1 means lower revenue.
What do extreme readings suggest?
Historical extremes have often coincided with cycle transitions. These are past tendencies, not guarantees of the future.
| Approximate range | Historical interpretation |
|---|---|
| Below roughly 0.3–0.5 | Extremely weak miner revenue, often seen near historical bottoms |
| 0.5–1.0 | Below average; possible depressed conditions or early recovery |
| 1.0–2.0 | Average to somewhat elevated revenue; a neutral range |
| Above 4.0 | Overheated miner revenue, often seen near past peaks |
These are not fixed buy and sell thresholds. In particular, a halving cuts mining rewards and can temporarily distort the indicator, so an absolute reading alone is insufficient.
Limitations and precautions
- Transaction fees excluded: Many versions include only new issuance rewards, excluding miner transaction-fee income and therefore differing from actual revenue.
- Structural change: Better mining efficiency, halvings and changes among major miners can complicate interpretation.
- Lag and noise: A one-year average responds slowly and is unsuitable as a short-term trading signal.
- Do not use it alone: One indicator cannot describe the entire market. Treat it as a supporting tool checked against other on-chain and price measures.
Recap
The Puell Multiple provides a supply-side reference for the Bitcoin cycle through miner revenue. Historical extremes have overlapped with bottoms and peaks, but cannot predict exact timing or prices. This article explains the indicator objectively and is not investment advice. Cryptocurrency carries substantial volatility and loss risk. No indicator guarantees returns, and decisions remain your responsibility.
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