The Bitcoin Price Is Massively Undervalued
With the Bitcoin momentum being fought out by the bulls and bears, one metric suggests Bitcoin is massively undervalued.
Down 11% since the monthly highs of $12,020, Bitcoin has bounced in the last 24 hours, and at the time of writing is currently $10,703.
Short-term predictions are always difficult to exact, and the relatively stable seesaw the BTC price is hovering in this month opens up strong arguments for both bear and bullish momentum.
Bloomberg analyst Mike McGlone is adamant the Bitcoin price is massively undervalued, however.
McGlone, a senior commodity strategist at Bloomberg, based his prediction on several factors including Bitcoin’s hashrate, which has recently hit another all time high.
The Bitcoin Hashrate
The Bitcoin hashrate is a measure of the processing power of the Bitcoin network. The distributed computer devices all mine Bitcoin, and their collective processing power is the Bitcoin hashrate.
The Bitcoin mining devices continuously make intensive mathematical operations, and it all helps the Bitcoin network run and secures it at the same time.
The Bitcoin hashrate continues to increase and recently reached new highs of 140 exahash per second (EH/s), which is up x10 of the hashrate recorded when Bitcoin hit its all time price of almost $20,000 in December 2017.
Given the strong correlation between the two, increasing hashpower suggests miners are optimistic about making profits, which usually pushes the price of Bitcoin higher.
Although it’s not an exact science between the two, the fact that the hashrate is ten times higher than it was in December 2017, and the cost of mining Bitcoin is much higher today, validates McGlone’s point.
Active Bitcoin Addresses: 30-Day Moving Average Creeping Up
As well as the Bitcoin hahsrate recently hitting another all-time high, the 30-day moving average for active Bitcoin addresses has soared and is currently at 1,002,503.
It’s only the second time in Bitcoin history the 30-day average has been above 1 million. The last time was back on 12 December 2017 when the price was marching towards the all time high.
The 30-day average is an excellent metric to size Bitcoin adoption, and according to McGlone,
‘The 30-day average of Bitcoin addresses is equivalent to the price closer to $15,000 when measured on an autoscale basis since 2017.’
With Bullish Fundamentals, Why Has There Been a Pull Back?
With Bitcoin fundamentals ever stronger, it’s hard to determine why the market has been bearish in recent weeks.
According to popular analyst Willy Woo, Bitcoin’s short-term correlation with the stock market was behind the latest pull back.
There are billions being invested in mining infrastructure, so the Bitcoin hashrate will continue to hit new all time highs.
And adoption is also clearly rising, even though most Bitcoiners don’t want to spend their Bitcoin yet.
We’re only four months past the last Bitcoin halvening, and are at least 12 months away from the cycle high.
The Bitcoin market is irrational, and that’s why short-term price predictions are harder to predict.
But many agree Bitcoin is undervalued, and as the metrics continue to rise and the cycle plays out, the medium to long-term prediction is certainly bullish.
As for a price prediction: Well PlanB says $288k at the cycle top, and who’s going to argue with him?