- Bitcoin’s current market price is not overvalued considering its inherent network fundamentals, according to CryptoQuant’s CEO.
- The evaluation of Bitcoin’s pricing through the Thermo Cap Ratio provides an intriguing lens to interpret the cryptocurrency’s valuation.
- “Bitcoin is not currently overvalued based on network fundamentals,” cryptically observes Ki Young Ju, founder and CEO of CryptoQuant.
Discover why Bitcoin may still hold potential for growth as its price is assessed through the Thermo Cap Ratio – alluding to undervaluation in the current market.
Bitcoin Price Assessment via Thermo Cap Ratio
Ki Young Ju, founder of CryptoQuant, recently elucidated that Bitcoin’s price may not be overvalued when examined through the Thermo Cap Ratio. The Thermo Cap Ratio is a unique metric that estimates Bitcoin’s capitalization by calculating the value of each token based on the spot price at the time it was mined.
Understanding Thermo Cap and Network Inflows
Unlike traditional market cap calculations, which evaluate the current market price of all circulating coins, the Thermo Cap offers a cumulative value of the coins mined since the blockchain’s initiation. As miners are the sole source of new Bitcoin entering the market, the Thermo Cap acts as a measurement of authentic capital inflows into the network, providing a more intrinsic valuation framework.
Thermo Cap Ratio Trends and Market Insights
The Thermo Cap Ratio, representing the proportion between Bitcoin’s market cap and its Thermo Cap, has exhibited a significant upward trajectory. Historical data suggests a correlation between high Thermo Cap Ratios and peaks in Bitcoin prices, indicating overvaluation at those moments. However, the current Thermo Cap Ratio shows a rise but has not yet reached the extreme levels synonymous with past market tops.
Current Bitcoin Market Behavior
As of now, Bitcoin’s price hovers around $68,900, displaying a period of consolidation without significant breakouts. This lateral price movement aligns with the Thermo Cap Ratio’s indication that Bitcoin might still be trading at a reasonable valuation relative to its network fundamentals.
Conclusion
In conclusion, Bitcoin’s present valuation, as analyzed through the Thermo Cap Ratio, suggests it is not overvalued. Investors and market participants might consider this an indicator of potential growth, as substantial capital inflows continue to support the network while avoiding historical peaks that typically signal overvaluation. This nuanced perspective provides a more refined understanding of Bitcoin’s market position and potential trajectory.
