Bitcoin is currently cheap amid ‘biggest oversold condition in years’, says Fidelity Macro Expert – here’s why
A senior executive at financial giant Fidelity Investments believes that Bitcoin (BTC) is currently a bargain.
Fidelity’s director of global macro Jurrien Timmer says that based on the thesis that the Bitcoin price will rise as the network grows, the flagship crypto-asset “looks cheap”.
“If you believe in Bitcoin’s adoption curve thesis (ie the network will continue to expand in line with past S-curves), then it’s reasonable to see Bitcoin as cheap at these levels.”
According to the macro expert, the price of Bitcoin is under the actual and projected growth of the network.
“For me, the main nuance is the slope of the adoption curve. Whether we use the cell phone curve or the Internet curve as proxies, Bitcoin’s price is below the actual and projected network growth curve. That curve provides a fundamental anchor for Bitcoin’s price.”
Timmer has previously explained that Bitcoin’s adoption rate is likely to do so mirror mobile phones or internet technology.
Using the analogy of Bitcoin as digital gold, Timmer says that the royal crypt was massively oversold during the last market downturn and has deviated from the trend when the two are compared side by side.
“If Bitcoin is gold’s early younger sibling, it makes sense to look at Bitcoin priced in gold (i.e. Bitcoin’s beta to gold). Technically, the recent selloff produced the largest oversold condition in years (measured as number of standard deviations from trend). »
The macro expert also says that in the middle of the crypto downturn, the percentage of Bitcoin held for less than three months (short-term owners) remains relatively unchanged while the percentage of Bitcoin held for over 10 years (long-term owners) ladders.
“Who buys Bitcoin these days? Apparently not the tourists (ie short-term holders). The percentage of Bitcoins held less than three months has barely budged lately.”
“But the number of HODLers continues to grow. The percentage of Bitcoin held for at least 10 years is now 13%.”
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Featured image: Shutterstock/Maria Starus
