Over the weekend, Bitcoin stayed relatively stable, trading between $54,000 and $55,000. This came after a significant shakeout in the market where crypto long positions were liquidated, following a U.S. jobs report that hinted at a weaker labor market. As we move into the week, traders are gearing up for important events like the U.S. Presidential debate and the release of economic indicators such as the Consumer Price Index (CPI) and Producer Price Index (PPI). Analysts from Presto Research are voicing that Bitcoin might be undervalued, especially given its record-high network security.
“The world has spent the last 15 years slowly but surely embracing the concept of ‘digital gold… Bitcoin seems grossly undervalued at the moment.”
Bitcoin’s True Value: Are We Missing Something?
According to Presto Research, Bitcoin is currently “grossly undervalued.” They argue that despite ongoing macroeconomic concerns, the market is not fully recognizing the asset’s true value. The team at Presto Research notes, “Price and value are different concepts. Price is a snapshot of where supply meets demand—objectively quantifiable but volatile and short-term. Value, on the other hand, is subjective, narrative-driven, and relatively stable, changing slowly.”
They point out that recent discussions have focused too much on the macro factors influencing Bitcoin’s price, but traders are overlooking one key fundamental: Bitcoin’s network security. Bitcoin’s hashrate, which measures the computational power protecting the network, has reached an all-time high of 679 EH/s, making it the most secure blockchain network globally. Yet, this achievement hasn’t been reflected in Bitcoin’s market price, they believe.
“The market is oblivious to this, as shown by the all-time low hash price of $39.01/PH/s/day,” Presto Research states. “This is the miner’s daily revenue per hash, but it can also be viewed as the price the market is willing to pay for the Bitcoin network’s security.” Essentially, even as Bitcoin’s network becomes more secure than ever, the compensation for Bitcoin mining remains at historic lows, suggesting a disconnect between the network’s security and its market valuation.
Presto Research adds, “The world has spent the last 15 years slowly but surely embracing the concept of ‘digital gold.’ If you believe that trend will continue, especially with the rising availability of spot ETFs, Bitcoin seems grossly undervalued at the moment.”
https://twitter.com/PrestoResearch/status/1832941424045924380
What to Watch This Week
Looking ahead, Bitcoin could see some movement with the release of critical economic data. On Tuesday, the CPI report will give us new insights into inflation, which has been a hot topic for investors. Following that, the PPI figures on Wednesday will offer a closer look at the producer side of the economy, impacting price trends down the line.
But it’s not just economic data to watch—politics is in play too. Also on Tuesday, Bitcoin-friendly Republican candidate Donald Trump will debate Democrat Kamala Harris. This debate could stir the markets, especially if any economic or crypto-related policies are discussed.
With so much happening this week, Bitcoin’s stability could be tested. Presto Research suggests that these price movements, however dramatic they might seem, don’t change the underlying value of Bitcoin. As they put it, “Amid macro factors dominating BTC price talk lately, the market is overlooking one of the key fundamentals underpinning Bitcoin’s value – network security.”
So, while it’s easy to get caught up in the daily price action, it’s essential to keep in mind the bigger picture. Bitcoin’s network security is stronger than ever, and according to Presto Research, the asset remains undervalued despite current market conditions.
For now, keep an eye on this week’s key events, stay informed, and continue to learn what is really driving Bitcoin’s value. For more updates and the latest news, keep following us at HowToBuyBitcoin.org.