Bitcoin ‘cheap’ at $20K as BTC price to wallet ratio mimics 2013

189
SHARES
1.5k
VIEWS

Bitcoin (BTC) hasn’t had this good value as it is priced at $1,130, with one analyst arguing that BTC offers a “compelling” risk/reward ratio.

one in twitter thread On July 7, Jurian Timmer, director of global macros at asset manager Fidelity Investments, described only $20,000 of bitcoin as “cheap”.

READ ALSO

Timer: “In other words, bitcoin is cheap”

While there are fears that the crypto markets may fall further this year, some believe that the current bitcoin price levels provide the kind of value for money that hasn’t been seen in years.

Analyzing BTC price versus the number of non-zero addresses – wallets with a positive balance – Timmer concluded that BTC/USD is now back where it was at the peak of the 2013 bull run.

At the time, BTC/USD managed to reach around $1,130, before consolidating for several years due to the demise of the exchange Mt Gox.

Timmer explained, “I use the price per million non-zero addresses as an estimate of bitcoin’s valuation, and the chart below shows that valuations have returned to 2013 levels, even though the price Only back to 2020 levels.”

“In other words, bitcoin is cheap.”

The bitcoin price/network ratio is not the only encouraging sign when it comes to the development of bitcoin despite the current bear market. Timmer added that bitcoin adoption still reflects the rise of the Internet, and that the bitcoin network “appears to be intact” when it comes to its development cycle.

When it comes to the price/network ratio, it is not only bitcoin that is showing signs of solid investment potential.

“If bitcoin is cheap, maybe ethereum is cheap,” he wrote.

“If ETH is where BTC was four years ago, the analog below suggests that Ethereum could be nearing a bottom.”
Bitcoin price/network ratio vs BTC/USD chart. Source: Jurian Timmer / Twitter

“0.5X Downside, 12X Upside”

Meanwhile, $20,000 BTC should still provide a “compelling” investment case, even for those who believe a 50% drop in value is still possible.

related: This ‘Bible’ Bitcoin Pattern Suggests BTC Price Could Rise 30% By October

This was the conclusion of James Lavish, a former hedge fund manager turned macroeconomics expert, who drew attention to the simple math involved in betting bitcoin in today’s environment.

“At $20K BTC, if you assume the downside risk is $10K and the upside potential is $250K, there is a .5X downside and 12.5X upside at these prices. This is a 25 to 1 reward for the risk profile ,” He Told Twitter followers.

“It’s compelling.”

While it’s hard to imagine this year, the $250,000 price tag for BTC/USD is actually quite modest by historical standards for price predictions.

Among its followers is billionaire Tim Draper, who nevertheless initially insisted that bitcoin would be worth a quarter million dollars by 2022.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, so you should do your own research when making a decision.