Jurrien Timmer, Fidelity’s Director of Global Macro, recently talked about bitcoin and said that the world’s largest cryptocurrency is not priced correctly. He said that an analysis of on-chain data metrics indicate that the true value of the coin could be significantly higher than its current value.
Fidelity Remains Bullish on Bitcoin
Last week, Timmer had tweeted a chart that highlighted the price of the world’s first cryptocurrency and the network ratio against its price in US dollars. The NVT ratio, which is the price/network ratio, is usually calculated when the price of the crypto is divided by its total trading volumes on-chain.
If this ratio turns out to be high, then it indicates that the asset in question is severely overvalued, while a low ratio indicates that the cryptocurrency is actually undervalued. According to Timmer, the NVT ratio of Bitcoin had come down to its lowest, which had last been recorded in the bull markets of 2013 and 2017. As far as the price of the cryptocurrency is concerned, it has plummeted to values that had last been recorded back in December 2020.
The executive also added that the price of a cryptocurrency was not as important as its value. He also added a chart that depicted the price of Bitcoin as well as the Bitcoin addresses. The purpose of this chart was to highlight that the price of the crypto was below the network’s address growth curve on average.
The dormancy flow of Bitcoin was also another measure that the Fidelity director analyzed. He said that this metric indicated that the crypto was oversold. The purpose of this metric is to determine the dormancy of the coins before they become active once more.
Fidelity’s Stance on Crypto
It is widely known that Fidelity has a bullish outlook when it comes to bitcoin. The asset management firm had recently made headlines when it announced that its clients would be able to add the world’s leading cryptocurrency to their 401(k) retirement accounts. But, the announcement has earned a lot of criticism from politicians and crypto critics.
Fidelity had also released a report back in January in which the company stated that bitcoin is not like the rest of the cryptocurrencies in the market. According to the asset manager, bitcoin is actually a monetary products, whereas the other cryptocurrencies available in the market, such as Ether (ETH) are actually venture investments.
Market Conditions
The last few weeks have been very troubling for the crypto market and the troubles have intensified in the last few days. There have been huge sell-offs recording in the space and Bitcoin-collateralized loans have also been liquidated in massive numbers.
The market is experiencing a downturn and this seems to be taking its toll on a number of companies operating in the space, which includes Celsius Network that has imposed a ban on withdrawals and transfers between accounts. Experts have predicted the beginning of another crypto winter, as bitcoin is coming down and even hit $17,800.
