Bitcoin Not ‘Overvalued’ Yet, Says CryptoQuant CEO: Here’s Why


The
CEO
of
the
on-chain
analytics
firm
CryptoQuant
explained
that
Bitcoin’s
price
isn’t
currently
overvalued
based
on
its
network
fundamentals.

Bitcoin
Price
May
Not
Be
Overvalued
Yet
Based
On
Thermo
Cap
Ratio

In
a
new

post
on
X,
CryptoQuant
CEO
and
founder
Ki
Young
Ju
has
discussed
about
how
the
recent
trend
in
the
Bitcoin
Thermo
Cap
Ratio
has
been
like.
The
“Thermo
Cap”
is
a
capitalization
model
for
BTC
that
calculates
the
total
value
of
the
asset
by
taking
each
token’s
value
as
the
same
as
the
spot
price
when
it
was
mined
on
the
network.

How To Get Free Crypto  


Related
Reading

Put
another
way,
this
model
calculates
the
cumulative
value
of
the
coins
mined
by
the
miners
since
the
inception
of
the
blockchain.
This
is
quite
different
from
what,
for
example,
the
usual

market
cap
does.
In
the
market
cap’s
case,
the
current
spot
price
is
taken
as
the
value
of
all
coins
in
circulation.

As
the
coins
that
miners
mine
are
the
only
way
to
increase
the
cryptocurrency’s
supply,
the
Thermo
Cap
may
be
considered
a
measure
of
the
“true”

capital
inflows
coming
into
the
network.

Here
is
a
chart
that
displays
how
the
Bitcoin
Thermo
Cap
has
changed
over
its
history:

The
value
of
the
indicator
appears
to
have
been
steeply
going
up
in
recent
years
|
Source:

@ki_young_ju
on
X

As
the
above
graph
shows,
the
Thermo
Cap
has
seen
an
accelerating
growth
curve.
This
naturally
reflects
the
increasing
amount
of
capital
flowing
into
the
asset
over
the
years.

Coinbase Banner  

In
the
context
of
the
current
topic,
though,
the
indicator
of
interest
isn’t
the
Thermo
Cap
itself
but
rather
the
Thermo
Cap
Ratio.
This
metric
tracks
the
ratio
between
the
Bitcoin
market
cap
and
the
Thermo
Cap.

The
chart
below
shows
the
trend
in
the
Thermo
Cap
Ratio
over
the
asset’s
history.

Looks
like
the
value
of
the
metric
has
been
going
up
in
recent
months
|
Source:

@ki_young_ju
on
X

An
interesting
pattern
is
visible
in
the
graph.
It
appears
that
very
high
values
of
the
Thermo
Cap
Ratio
have
coincided
with
highs
in
the
cryptocurrency’s
price.


Related
Reading

At
high
values,
the
Bitcoin
market
cap
is
quite
large
compared
to
the
Thermo
Cap,
meaning
that
coins
are
trading
at
a
much
higher
rate
than
they
were
mined
at.

It’s
also
apparent
that
bottoms
in
BTC
occur
when
the
ratio
assumes
low
values.
The
recent
trend
in
the
indicator
has
been
that
of
a
rise,
but
its
value
has
not
touched
the
levels
where
bull
run
tops
would
have
happened
in
the
past.
“Bitcoin
is
not
currently
overvalued
based
on
network
fundamentals,”
notes
the
CryptoQuant
founder.

FreeBitcoin Banner  

BTC
Price

Bitcoin
has
been
unable
to
break
out
of
its
range
recently
as
its
price
has
kept
up
the
trend
of
sideways
movement.
At
present,
BTC
is
trading
at
around
$68,900.

The
price
of
the
coin
seems
to
have
been
consolidating
recently
|
Source:

BTCUSD
on
TradingView

Featured
image
from
Dall-E,
CryptoQuant.com,
chart
from
TradingView.com

Go to Source
Author: Keshav Verma


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