Fidelity Macro Anlayst Says Bitcoin (BTC) Is “Attractively Valued” At Current Price — Here’s Why
A well-regarded macro analyst at financial services giant Fidelity says Bitcoin has reached a price level that makes it “attractively valued.”
Fidelity analyst Jurrien Timmer shares with his 114,000 Twitter followers that he looks at the Bitcoin to Gold ratio, which compares the price of both stores of value against each other.
“First up is the bitcoin/gold ratio, which I see as a barometer of how this emerging digital store of value is performing relative to this ‘original’ store of value.
The BTC/Gold ratio is now resting on major support in the form of the 2017 high as well as the 2021 low. At the same time, the detrended Bollinger Band shows that the ratio is now 2 standard deviations below trend, which is a level that the last 3 declines.”
Source: Jurrien Timmer/Twitter
The analyst is also keeping an eye on Bitcoin’s quiescent current, which gauges the market’s issuance patterns by tracking the average number of days that each traded coin remained dormant. Timmer notes that the metric is currently at levels not seen since 2018.
“Next is resting flow, which is roughly a measure of strong and weak hands. Glassnode company-adjusted quiescent current is now at its lowest since the 2014 and 2018 lows.”
Timmer shares a model that compares Bitcoin’s adoption to the rise of the internet and mobile phones. Assuming BTC and cryptocurrencies are adopted at the same level as the internet and mobile phones, according to the metric, Bitcoin is now significantly undervalued.
“Next comes the assessment. With the current swoon at $25,000, Bitcoin is now below the price currently suggested by both my mobile-based S-curve model and the more conservative internet adoption model.”
The Fidelity analyst says he finds it remarkable that despite Bitcoin’s significant price correction, HODLers seem undeterred from its all-time highs. His models show that the number of bitcoins held for more than 10 years is consistent at 13%.
Timmer says that given all the metrics available, Bitcoin is currently at a historically attractive price and resting on solid support. However, the only variable is the stock market, which he believes is clearly having an impact on BTC’s price action.
“All of this tells me that bitcoin is not only solidly supported but also attractively valued. The only caveat is that bitcoin-sensitive stocks need to confirm any recovery for bitcoin.
They were the canary in the coal mine before Bitcoin crashed a few weeks ago and they need to show strength in the recovery for me to have confidence in Bitcoin’s rally prospects.”
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