Director of Global Macro at Fidelity Investments Jurrien Timmer recently said that Bitcoin’s “P/E” measure is back to levels last seen in 2017 and 2013, despite the fact that the price of Bitcoin has rebounded to levels last seen in late 2020.
According to Timmer, valuation is “frequently more significant than price,” and BTC’s valuation suggests that the leading cryptocurrency is undervalued at now.
In a subsequent tweet, Timmer compared Bitcoin’s non-zero addresses to its price and discovered that the cryptocurrency’s price “is currently below the network curve,” implying that BTC is undervalued after its recent significant sell-off.
At the time of writing, the leading cryptocurrency is trading at $20,000 after losing over 9 percent of its value in the previous 24 hours. Additionally, BTC has lost about 60 percent of its value over the last six months, when it was trading near $50,000 early this year.
Bitcoin’s price has plummeted due to a multitude of macroeconomic issues, including rising global inflation and the continuing Russian invasion of Ukraine, as well as the crypto lender Celsius Network halting withdrawals on its platform due to “extreme market circumstances.” These reasons have caused the overall capitalization of the cryptocurrency market to go below $1 trillion for the first time since early 2021.
Timmer noted in his post that another sign of how “technically oversold Bitcoin is” is Glassnode’s dormant flow gauge, which displays values not seen in over a decade.
In terms of how Glassnode calculates dormancy, it is defined as the ratio of coin days destroyed to total transfer volume, or the “average number of days eliminated per coin transacted.” Its entity-adjusted dormancy flow signal is the ratio between its present market capitalization and annualised dormancy value.
The amount of coins in a transaction multiplied by the number of days since they were last spent is the number of coin days destroyed.
As reported by CryptoGlobe, Robert Kiyosaki, the very successful author of the “Wealthy Dad Poor Dad” series of personal finance books, said that “crisis times are the perfect times to become rich” in reference to Bitcoin’s fall.
Kiyosaki said that the BTC drop was “excellent news” because he is “waiting for Bitcoin to crash below $20,000” so that he can “load up” when the bottom is reached.