Fidelity’s director of global macro, Jurrien Timmer, claimed that Bitcoin (BTC) could be “cheaper than it appears,”. Timmer told his 126,000 Twitter followers that while Bitcoin’s price has gone back to 2020 levels. Its price-to-network ratio has plummeted to 2013 and 2017 levels, indicating that it is undervalued.
The price-to-network ratio is a crypto-version of the price-to-earnings (P/E) ratio, which is used to judge whether a stock is overvalued or undervalued by traditional stock market investors. A high ratio may indicate that an asset is overvalued. A low ratio may indicate that an asset is undervalued.
Timmer drew attention to a graph of Bitcoin’s demand curve overlaid with non-zero addresses versus market cap. It showed that the “price is presently resting below the network curve.”
The macro analyst also published a graph that he said shows “how technically oversold Bitcoin is,” using Glassnode’s dormant flow indicator. Entity-adjusted Dormancy Flow is a popular statistic for determining the value of Bitcoin by comparing the price to spending patterns.
A low dormancy flow number, according to Glassnode, can indicate stronger long-term holding conviction. That implied that long-term Bitcoin HODLers are buying up from jittery short-term sellers.
In an interview with Fox Business Monday, Morgan Creek Digital co-founder and Youtuber Anthony Pompliano had a similar sentiment, saying that Bitcoin’s “worth and price are diverging” and that “weak hands are selling to powerful hands.”
Fidelity Investments and Timmer, one of its analysts, are bullish on Bitcoin. The financial behemoth is working on developing a Bitcoin retirement investment scheme that would allow those with 401(k) retirement savings accounts to invest directly in Bitcoin. Timmer has predicted that Bitcoin will witness a resurgence in the near future.