CoinTrust

Fidelity’s Macro Analyst Says Bitcoin is Trading Cheap, but Ethereum Cheaper

After many months of price capitulation, the director of global macro at Fidelity assessed the current standing of cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH). According to his S-curve model, Jurrien Timmer has informed the 131,200 people who follow him on Twitter that he believes Bitcoin is now undervalued at its present price.

The model makes an effort to determine the value of BTC by projecting the future expansion of its network based on the pace at which consumers joined the internet. This is done in an effort to estimate the value of BTC.

It would be an exaggeration to say that Bitcoin and cryptocurrencies in general have not been shielded from the broad drawdowns that have occurred this year. Bitcoin, which just hit a low of $17,600, is currently trading at a price that is lower than even my more cautious S-curve model, which is predicated on the adoption rate of the internet.”

The next thing that Timmer does is voice his opinion that the rate of Bitcoin adoption more accurately simulates that of the early days of the internet than that of mobile phones. He does this by referencing Metcalfe’s Law, which states that the value of a network increases in proportion to the count of users that are on the network.

When considering the expansion of the Bitcoin network, it is evident that the adoption curve is following the more asymptotic pattern of the internet adoption rate, instead of the more increasing pattern of the mobile phone adoption rate. Metcalfe’s law indicates that there will be a more moderate increase in price if there is a slower expansion in the network.”

Timmer further states that he is examining at the amount of non-zero Bitcoin addresses as a technique of assessing the genuine worth of BTC. He says that in spite of the fact that the market is in a bear market, Bitcoin is still vastly cheap.

When I make an assessment of Bitcoin’s worth, I utilize the price per million of non-zero addresses as my basis. The figure below demonstrates that valuation has returned to levels last seen in 2013, despite the fact that price has just returned to levels last seen in 2020. In simple words, the price of Bitcoin is very attractive and cheap.

Bitcoin’s price has increased by 1.28 percent during the last twenty-four hours, and it is now trading at $21,806. The analyst sums off his line of inquiry by wondering whether or not Ethereum may be seen as comparably more affordable than Bitcoin. Timmer makes the assumption that Ethereum’s price movement is slightly behind Bitcoin’s market cycle by four years and uses this to make a comparison between the present price decline of ETH and the bear market that Bitcoin experienced in 2018.

If Bitcoin is already inexpensive, then maybe Ethereum is an even better value. If the current price of Ethereum is comparable to that of Bitcoin four years back, then the analog shown below shows that Ethereum may be approaching a bottom.”

The current asking price for Ethereum is $1,231, and the cryptocurrency has been moving in a range today.

Exit mobile version