according According to Fidelity’s Jurian Timmer, bitcoin is currently undervalued. The benchmark crypto has been pushed back to 2020 levels after losing over 70% of its value in the past months.
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At the time of writing, bitcoin is starting to show some green as it bounces back above its 2017 all-time high. The cryptocurrency is trading at $21,900 with a gain of 1% over the past 24 hours.
Bitcoin at 2013 valuation level, lowest price in years
Via Twitter, Timer wrote about Crypto Winter and why the price of BTC was undervalued according to its “conservative” price S-curve model. The expert has designed this price model based on the exponential expansion of the Internet and mobile phones.
As seen below, the recent downside Bitcoin price action is following the demand model of the Internet, which could lead to slower network growth and “slight price appreciation”. If the price of BTC continues to follow this model in the coming years, the cryptocurrency could be worth around $100,000 by 2030.
Timer claims that bitcoin continues to follow its demand curve, despite its recent decline below its previous all-time highs. This means that people are still buying BTC despite the price drop.
Experts claim that the cryptocurrency has reached the valuation level of 2013. Meanwhile, the number of BTC non-zero addresses is trending downward. In other words, as the price of BTC drops, people seem to buy it. Timer said:
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 is only at 2020 levels. is back. In other words, bitcoin is cheap.
What is a cheap bitcoin spell for ethereum
When Timmer compared the current price of BTC to Ethereum, he concluded that the second crypto may also be “cheaper” by market cap. The price of ETH experienced a decline “similar” to that of Bitcoin in 2018.
At the time, the number one crypto by market cap had grown from around $3,000 to over $20,000. In subsequent years, it will go back to the former level.
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As seen below, Ethereum may be following this trajectory. Timer explained:
If bitcoin is cheap, maybe ethereum is cheap. If ETH is where BTC was four years ago, the analog below suggests that Ethereum could be nearing a bottom.