For the past week, the price of bitcoin has been range bound. The currency has recently risen in value. It has not yet hit $20,000 in value. The price of Bitcoin has remained stable between $18,000 and $20,000.
BTC has fallen 0.4% in the previous 24 hours, indicating minor price movement.
Known for his astute and timely analysis of Bitcoin (BTCprice) price movement, crypto expert Cowen recently argued that BTC is still considerably undervalued in an interview with Real Vision Crypto.
Significant undervaluation of BTC continues: Here’s the truth
His logarithmic regression study shows that crypto assets are significantly undervalued compared to their true market worth.
“I’ve shown this chart before, and it’s been useful. Total market cap for all cryptocurrencies is shown in blue. Fair value logarithmic regression trendline is shown in red.”
- The key tenet of this theory is that the fair value of the asset class known as crypto steadily rises over the course of time, and that our prices tend to fluctuate around that fair value.
- At this point in time, the data would seem to indicate that it is approximately fifty percent undervalued in comparison to where the fair value is.
- Even while the current pricing of cryptocurrencies may seem appealing to long-term investors, Cowen cautions that the asset class may still experience a further 15% decline.
- However, the chart also implies that significant bottoms typically occur closer to a level of say 60% to 65% undervalued before we can really maintain another bull market. This is before we can really sustain another bull market.
- It will take some more time, he says, before the market can start to recover from the current downturn.
- As the topic of discussion shifts to Bitcoin, Cowen estimates that it will be at least one year and four months before the most prominent cryptocurrency can make a surge back to its fair value.
“The price of Bitcoin has always been at its fair value at the time when it has been halved.”
Consequently, throughout each and every bear market, the price of bitcoin drops below its true worth, and by the time we reach the next Bitcoin halving, the price has returned to its previous level.