Bitcoin is undervalued according to this expert’s conservative model
According to Fidelity’s Jurrien Timmer, Bitcoin is currently undervalued. The benchmark crypt has been pushed back to 2020 levels after losing over 70% of its value in recent months.
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At the time of writing, Bitcoin has started to show something green as it recovers from its 2017 all-time high levels. The cryptocurrency is trading at $ 21,900 with a profit of 1% over the last 24 hours.
Bitcoin at 2013 valuation levels, most underpriced this year
Via Twitter, Timmer wrote about Crypto Winter and the reasons why BTC’s price is underestimated according to his “conservative” price S-curve model. The expert designed this pricing model based on the exponential expansion of the internet and mobile phones.
As shown below, the recent downside of the Bitcoin price action seems to follow the Internet demand model, which could lead to lower network growth and “modest price increases”. If BTC’s price continues to follow this model in the coming years, the cryptocurrency could be priced at around $ 100,000 by 2030
Despite the recent downward price action below the previous record high, Timmer claims that Bitcoin continues to follow the demand curve. This means that people are still buying BTC despite the price crash.
The expert claims that the cryptocurrency reached a 2013 value level. At the same time, the number of non-zero BTC addresses is trending to the downside. In other words, as BTC’s price falls, it seems that people are buying it. Timmer said:
I use the price per million of non-zero addresses as an estimate of Bitcoin’s valuation, and the chart below shows that the valuation is all the way back to 2013 levels, even if the price is only back to 2020 levels. In other words, Bitcoin is cheap.
What a cheap Bitcoin spell for Ethereum
When Timmer compared BTC’s current valuation with Ethereum, he concluded that the second crypto by market value could be even “cheaper”. ETH’s price has experienced a “similar” decline as for Bitcoin in 2018.
At that time, the market value of krypton increased from around $ 3,000 to $ 20,000. In the following years, it would return to its previous level.
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As shown below, Ethereum can follow this path. Timmer explained:
If Bitcoin is cheap, then maybe Ethereum is cheaper. If ETH is where BTC was four years ago, then the analogue below suggests that Ethereum may be near the bottom.
