Bitcoin Fundamentals Suggest Cryptocurrency Is Massively Undervalued

Bitcoin price action might not reflect it, but the leading cryptocurrency by market cap could be massively undervalued, according to a variety of fundamental metrics that focus on coin issuance.
These tools are widely known, but when combined paint a clear picture that backs up any chance that the top coin by market cap is actually undervalued at $40,000 per BTC.
Speculative Boom And Bust Cycles And The Impact On Perception Of Value
Any asset – be it stock, currency, commodity, or otherwise – goes through boom and bust cycles; bull and bear markets. These cycles are more rapid and take place more frequently in crypto than they do in traditional market counterparts.
The reason is both due to the always-on 24/7, global crypto market and the speculative nature of Bitcoin, Ethereum, and other top coins. Even with adoption taking place, they’re still far from achieving their potential.
Related Reading | Five Bullish Monthly Charts That Suggest Bitcoin Will Blast Off
When speculative assets reach a peak of a bull cycle, they are typically far more overvalued than they should be, which causes such an extreme correction back down toward the “mean.” During bear cycles, speculative assets tend to overcorrect as things appear worse off than they actually are.
Bu this is Bitcoin, and the leading cryptocurrency by market cap might be undervalued even though it recently made a bull market “peak.”

S2F and the Puell Multiple point to an undervalued BTC | Source: BLX on TradingView.com
Bitcoin Undervalued According To S2F Model, Puell Multiple
Bitcoin might have collapsed by 50% along with the rest of the crypto market, but it could be significantly undervalued currently due to the overcorrection.
Bitcoin corrected and it was characteristically extreme, but due to the ongoing lack of supply the cryptocurrency is significantly below the normal trajectory through the stock-to-flow model “bands”.
Related Reading | Bitcoin Trend Strength Indicator Suggests Bull Run Isn’t Yet Over
In addition, the Puell Multiple is bouncing from lows, and during this cycle has yet to enter the red zone which is standard of any Bitcoin bull market “top.” The Puell Multiple is calculated “by dividing the daily issuance value of bitcoins (in USD) by the 365-day moving average of daily issuance value.”
The S2F model is more complex, but both look at how issuance impacts overall supply and the price per BTC. Combined, the two fundamental tools suggest that the bull market isn’t finished, and is entering its final stages. The last leg up in Bitcoin as past cycles have proven, will be dramatic and entirely driven by FOMO and a distinct lack of supply.
Follow @TonySpilotroBTC on Twitter or via the TonyTradesBTC Telegram. Content is educational and should not be considered investment advice.
Featured image from iStockPhoto, Charts from TradingView.com

Avatar

Related Articles

- Advertisement -

Latest Articles

bitcoin
Bitcoin (BTC) $ 27,219.29
ethereum
Ethereum (ETH) $ 1,905.70
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 307.40
usd-coin
USD Coin (USDC) $ 1.00
xrp
XRP (XRP) $ 0.525765
staked-ether
Lido Staked Ether (STETH) $ 1,904.34
cardano
Cardano (ADA) $ 0.381815
dogecoin
Dogecoin (DOGE) $ 0.073133
solana
Solana (SOL) $ 21.64
matic-network
Polygon (MATIC) $ 0.905704
tron
TRON (TRX) $ 0.081890
litecoin
Litecoin (LTC) $ 96.32
polkadot
Polkadot (DOT) $ 5.37
binance-usd
Binance USD (BUSD) $ 1.00
shiba-inu
Shiba Inu (SHIB) $ 0.000009
avalanche-2
Avalanche (AVAX) $ 14.75
dai
Dai (DAI) $ 0.999627
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 27,244.30
uniswap
Uniswap (UNI) $ 5.13
chainlink
Chainlink (LINK) $ 6.50
leo-token
LEO Token (LEO) $ 3.59
cosmos
Cosmos Hub (ATOM) $ 10.81
okb
OKB (OKB) $ 45.99
monero
Monero (XMR) $ 149.82
ethereum-classic
Ethereum Classic (ETC) $ 18.22
the-open-network
Toncoin (TON) $ 1.74
stellar
Stellar (XLM) $ 0.092551
bitcoin-cash
Bitcoin Cash (BCH) $ 116.61
internet-computer
Internet Computer (ICP) $ 4.86
filecoin
Filecoin (FIL) $ 4.87
lido-dao
Lido DAO (LDO) $ 2.34
true-usd
TrueUSD (TUSD) $ 0.999382
aptos
Aptos (APT) $ 9.08
quant-network
Quant (QNT) $ 117.89
hedera-hashgraph
Hedera (HBAR) $ 0.050997
crypto-com-chain
Cronos (CRO) $ 0.060474
arbitrum
Arbitrum (ARB) $ 1.23
near
NEAR Protocol (NEAR) $ 1.64
vechain
VeChain (VET) $ 0.020043
the-graph
The Graph (GRT) $ 0.129760
apecoin
ApeCoin (APE) $ 3.16
algorand
Algorand (ALGO) $ 0.153065
the-sandbox
The Sandbox (SAND) $ 0.577959
eos
EOS (EOS) $ 0.921299
paxos-standard
Pax Dollar (USDP) $ 0.999396
frax
Frax (FRAX) $ 0.999637
render-token
Render (RNDR) $ 2.74
elrond-erd-2
MultiversX (EGLD) $ 38.65
optimism
Optimism (OP) $ 1.51