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Breaking News: New Hope For Crypto: Senators Introduce Blockchain Regulatory Certainty Act

Why Bitcoin Is Undervalued According To This Expert’s “Conservative” Model

Reynaldo Marquez
Reynaldo Marquez
Last Updated: June 11, 2024 11:31 am
2 mins read
Bitcoin BTC BTCUSD

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According to Fidelity’s Jurrien 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.

Related Reading | Crypto Traders Lose $280 Million Following Bitcoin’s Break Above $22,000

At the time of writing, Bitcoin has begun showing some green as it makes its way back above its 2017 all-time high levels. The cryptocurrency trades at $21,900 with a 1% profit in the last 24 hours.

Bitcoin BTC BTCUSD
BTC’s price trends to the downside on the 4-hour chart, but sees some relief in lower timeframes. Source: BTCUSD Tradingview

Bitcoin At 2013 Valuation Levels, Most Underpriced In Years

Via Twitter, Timmer wrote about the Crypto Winter and the reasons why BTC’s price is undervalued according to his “conservative” price S-curve model. The expert designed this price model based on the exponential expansion of the internet and mobile phones.

As seen below, the recent downside Bitcoin price action seems to be following the internet’s demand model which could lead to slower network growth and “modest price appreciation”. If BTC’s price continues to follow this model over the coming years, the cryptocurrency could be priced at around $100,000 by 2030

Despite the recent downside price action below its previous all-time high, Timmer claims Bitcoin continues to follow its demand curve. This means that people are still buying BTC despite the price crash.

The expert claims the cryptocurrency reached a 2013 valuation level. At the same time, the number of BTC non-zero addresses is trending to the downside. In other words, as BTC’s price declines, people appear to be buying it. Timmer said:

I use the price per millions of non-zero addresses as an estimate for Bitcoin’s valuation, and the chart below shows that valuation is all the way back to 2013 levels, even though price is only back to 2020 levels. In other words, Bitcoin is cheap.

Bitcoin BTC BTCUSD
BTC’s demand curve compared to the adoption of the internet and mobile technologies. Source: Jurrien Timmer via Twitter

What A Cheap Bitcoin Spells For Ethereum

When Timmer compared BTC’s price current valuation to that of Ethereum, he concluded that the second crypto by market cap could be even “cheaper”. ETH’s price has experienced a “similar” drawdown to that of Bitcoin in 2018.

At that time, the number one crypto by market cap rallied from around $3,000 to $20,000. In subsequent years, it would revisit the former level.

Related Reading | Solana Glints With 14% 3-Day Rally – Will SOL Keep On Beaming?

As seen below, Ethereum could be following this trajectory. Timmer explained:

If Bitcoin is cheap, then perhaps Ethereum is cheaper. If ETH is where BTC was four years ago, then the analog below suggests that Ethereum could be close to a bottom.

Bitcoin BTC BTCUSD Ethereum
ETH’s price could be following a trajectory similar to that of Bitcoin in 2018. Source: Jurrien Timmer via Twitter
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Reynaldo Marquez
Reynaldo Marquez

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

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