Bitcoin (BTC) hasn’t been as low cost because it price $1,130, one analyst argues, as BTC affords a “compelling” risk-reward trade-off.
In a July 7 Twitter thread, Jurrien Timmer, director of world macro at asset supervisor Constancy Investments, described $20,000 Bitcoin merely as “low cost.”
Timmer: “In different phrases: Bitcoin is affordable”
Whereas fears linger that crypto markets might undergo additional declines this yr, some imagine the present bitcoin value level affords value not seen in years.
Timmer analyzed the BTC value versus the variety of non-zero addresses – wallets with a optimistic steadiness – and concluded that BTC/USD is now again the place it was on the peak of the 2013 bull market.
Again then, BTC/USD managed to hit round $1,130 earlier than consolidating for a number of years due to the demise of the Mt. Gox alternate.
“I take advantage of the worth per million non-zero addresses as an estimate for bitcoin’s valuation, and the chart under reveals that the valuation goes again to 2013 ranges, despite the fact that the worth solely goes again to 2020 ranges,” defined Timber.
“In different phrases, bitcoin is affordable.”
Bitcoin’s value/community ratio is not the one encouraging signal in the case of Bitcoin’s development regardless of the present bear market. Timmer added that bitcoin adoption nonetheless displays the rise of the web and that the bitcoin community “seems to be intact” in the case of its development cycles.
On the subject of the worth/community ratio, bitcoin is not the one one displaying indicators of strong funding potential.
“If bitcoin is affordable, then possibly ethereum is cheaper,” he wrote.
“If ETH is the place BTC was 4 years in the past, then the analog under suggests Ethereum may very well be near bottoming out.”Bitcoin value/community ratio vs BTC/USD chart. Supply: Jurrien Timmer/ Twitter
“0.5 instances down, 12 instances up”
$20,000 BTC, in the meantime, ought to nonetheless present a “compelling” funding case, even for many who imagine a 50% value drop continues to be potential.
Associated: This “biblical” bitcoin sample means that BTC value can surge 30% by October
That was the conclusion of James Lavish, a former hedge fund supervisor turned macroeconomics professional who drew consideration to the easy math concerned in betting Bitcoin in at this time’s atmosphere.
“When you imagine at $20,000 BTC that draw back danger is $10,000 and upside potential is $250,000, then at these costs there’s a 0.5x downtrend and a 12.5x uptrend. This can be a 25-to-1 reward-to-risk profile,” he advised his Twitter followers.
“That is convincing.”
Whereas it is onerous to think about this yr, a $250,000 price ticket for BTC/USD is definitely fairly modest in comparison with historic value prediction requirements.
Amongst her supporters is billionaire Tim Draper, who nonetheless initially insisted that Bitcoin would price 1 / 4 of 1,000,000 {dollars} by 2022.
The views and opinions expressed herein are solely these of the writer and don’t essentially replicate the views of Cointelegraph.com. Each funding and trading transfer entails danger, it’s best to do your personal analysis when making a call.