Bitcoin (BTC) Most Undervalued in 10 Years According to Stock-to-Flow Model

According to the stock-to-flow deflection chart, today, bitcoin is the most undervalued with respect to the last 10 years of its history.

A similar situation occurred in the middle of the 2017 bull market. After which, the BTC price continued its exponential growth.

Additionally, bitcoin is deviating from its 11-year uptrend line. The deviation reaches 36% negative. This gives an additional signal that the value of BTC is undervalued and also shows room for upside. The peaks of previous bull markets led the major cryptocurrency high above this trendline.

Record deflection from stock-to-flow
In a recent tweet, cryptocurrency trader @CryptoMichNL pointed out that bitcoin’s price deflection chart from the popular stock-to-flow model is at its lowest level in over 10 years.

Today’s BTC price is oscillating around $40,000, while according to the model, it should already be slightly above $100,000.

Bitcoin Cryptocurrency (Image: MaxPixel)
Bitcoin Cryptocurrency (Image: MaxPixel)

The last time such a significant negative deviation occurred was in the early days of the network development. Back then BTC cost less than $0.1 in October 2010 (yellow circle).

Moreover, the chart shows another moment in the history of the major cryptocurrency when the deflection almost touched current levels (blue circle).

This was in July 2017, in the middle of the previous bull market, when bitcoin cost around $2,000. A few months later, its price continued an exponential rise. This took it to the historical all-time high of $20,000 in December 2017.

The stock-to-flow deflection chart, therefore, not only gives a general indication of the relative value of BTC. It also provides an additional argument that the cryptocurrency market is in the middle of a long-term bull market.

This remains in line with a number of on-chain analysis indicators that are currently providing similar readings.

The stock-to-flow model popularised by @100trillionUSD reaches back to the now-classic book “The Bitcoin Standard” by Saifedean Ammous.

It expresses the relationship of stock, circulating supply, flow, or new production, of any asset whose quantity increases over time. For bitcoin, it is the circulating supply of coins in relation to newly mined coins.

Read more:beINcrypto

4 Reasons to Be Bullish as Bitcoin Breaks Back Above $40K

With BTC’s price regaining traction and heading towards $40,000, it’s worth reviewing four (ok, five) reasons why you should be more bullish.

Although bitcoin has already added $10,000 of value in a week to $40,000, some on-chain features suggest even more bullish developments awaiting right around the corner. From the Stablecoin Ratio to increasing active addresses to corporations buying and holders still holding.

Reason 1: Bitcoin to Stablecoin Ratio
According to data from CryptoQuant, the Bitcoin to stablecoin ratio oscillator has gone into bullish territory. This metric highlights the ratio of the number of bitcoins to stablecoins stored on all exchanges.

The analytics company said this metric has a “perfect BTFD hit rate since 2019.” CryptoQuant encouraged BTC bulls by adding, “it just printed another buy signal,” as the stablecoins sitting on exchanges have far superseded the bitcoins, suggesting more potential purchases.

Bitcoin Electronic Money (Image: MaxPixel)
Bitcoin Electronic Money (Image: MaxPixel)

It’s worth noting that the Bitcoin Stablecoin Supply Ratio, which works similarly, has also been declining in the past few months.

Reason 2: The Bottom Is In?
Jurrien Timmer, the Director of Global Macro at Fidelity Investments, also opined about BTC’s recent price developments. In fact, he believes the massive price slump towards $30,000 was actually the bottom.

He came to this conclusion by comparing the BTC/USD chart with the GS Retail Favorites Basket. History shows that the correlation between the two has been relatively high, suggesting that bitcoin could indeed mimic the basket’s performance.

Reason 3: Corporations Keep Buying, Institutional Praise
While some reports suggested that short-term investors had sold off their BTC holdings during the recent crash, others have only doubled down. Such is the case with MicroStrategy.

Michael Saylor’s NASDAQ-listed business intelligence giant plans to allocate another $1 billion in the primary cryptocurrency after a new stock offering.

The executive, who became among the most prominent BTC bulls in the past year, took it to Twitter to advise those who plan to have 5% of their portfolios in the asset that the remaining 95% will be “demonetized by bitcoin.”

Read more: CryptoPotato

Please, Stop Saying Bitcoin Is Dead

My Bitcoin is down by more than $100,000 and I’m grinning. 13 years on, we’ve heard it all before. Here’s what is missed.

Saying Bitcoin is dead is nothing new.

It’s become so common that a website that tracks this bizarre phenomenon has recorded 416 times Bitcoin has been declared dead … and survived. Bitcoin rising from the dead is programmed into its code. Bitcoin will be declared dead many more times because it’s a silent protest that challenges the status quo. 13 years on, Bitcoin is still alive and breathing and roaring back to life.

My own Bitcoin portfolio is down more than $100,000. I am grinning at all the losses.

Here’s what is overwhelmingly misunderstood:
Bitcoin is a religion.

One of the greatest investors of all time, Paul Tudor Jones, snuck a comment into a conversation with another legendary investor, Stan Druckenmiller. This comment changed my understanding of what Bitcoin is.

Image by 3D Animation Production Company from Pixabay
Image by 3D Animation Production Company from Pixabay

“Do you know that when Bitcoin went from $17,000 to $3000 that 86% of the people that owned it at $17,000, never sold it?”
John Street Capital on Twitter summed it up beautifully: “86% of the [Bitcoin] owners are religious zealots.” That’s why hedge funds and Wall Street are loving the huge crash in the Bitcoin price and buying more, not selling like retail investors.

The network effects of a technology are huge and explain a lot of the enormous growth we’ve seen in stocks such as Amazon, Netflix, and Facebook. Bitcoin has even greater network effects than Web 2.0 tech companies. But Bitcoin also has a fiercely loyal user base that won’t disappear, even when 50% of the value of their investment drops. Bitcoin isn’t dead.
The power of religious user loyalty is misunderstood.

Bitcoin doesn’t need influencers to market itself.

The adult babies saying Bitcoin is dead are influencers looking for clicks. You can’t be angry at adults trying to buy food and pay their bills. I get it.
But Bitcoin is an unconventional technology. It has no payroll, no office, and no marketing team. Bitcoin relies solely on word of mouth to survive and grow. There’s another thing that is missed.

Bitcoin is now a brand.

The Bitcoin car in the Indy 500 shows quietly what Bitcoin is becoming. Bitcoin is more than a brand, though. Bitcoin is a movement. The movement has one message to share… Stop creating money out of thin air and giving it to the elites and institutions.

Bitcoin users are saying nicely, “Give us free markets again.” When the stock market needs to dip because of high unemployment or a global health crisis, let it. As long as markets are propped up with money created out of thin air, inequality will rise.

Read more: The Ascent

3 Tips To Win at the Bitcoin Accumulation Game

Since its inception, Bitcoin has seen its price rise from a few cents to nearly $60k as of this writing. This phenomenal increase in the price of Bitcoin in just twelve years might lead you to believe that the best is behind us. The reality is quite different.

Bitcoin is not like a stock in a company that is listed on the stock market.

Bitcoin is a monetary revolution that will change the lives of hundreds of millions of people in the future. The digital currency invented by Satoshi Nakamoto has far greater reach than any of the GAFAM for example.

Bitcoin is all about power
At most 1% of the world’s population currently owns Bitcoin. Of that 100 million people, half (at best) really understand the liberating potential of Bitcoin. Many still think of Bitcoin as just another financial investment.
In reality, Bitcoin is about power, not money.
As more and more people realize this in the coming years, the demand for Bitcoin will explode. Everyone will want to own Bitcoin. On the other hand, the supply will remain frozen at 21 million units. This is the strength of the Bitcoin system, which has a programmatic monetary policy that highlights the virtues of quantitative hardening.

Image by 3D Animation Production Company from Pixabay
Image by 3D Animation Production Company from Pixabay

With demand increasing exponentially and supply hard-capped, the price of Bitcoin can only increase phenomenally in the future if we stick to the principles that govern the law of supply and demand.
Your best bet is to accumulate as much BTC as you can while you can. The “Stack Sats” movement that was born in the heart of summer 2019 is here to remind you of this essential truth.

Bitcoin is an accumulation game, and you must adapt to take full advantage of it
Bitcoin is indeed an accumulation game for years to come.
In this accumulation game that has been brewing for many months now, we can see two categories of people emerging: weak hands and strong hands. The weak hands are people who have a lot of questions. These people have a hard time accumulating Bitcoin.
During a bear market, weak hands are reluctant to take action by asking themselves this question:
“What if Bitcoin price keeps going down?”
During a bull market, the weak hands refuse to take action with a new question that paralyzes them:
“What if Bitcoin price has reached its top?”

Those who focus solely on the short-term price of Bitcoin cannot be among the winners
By always trying to buy the lowest and sell the highest, these weak hands are making mistakes. First, when they start buying Bitcoin, it is often after a trend reversal. Second, they sell it at the slightest drop in price for fear of losing money.

Read more: IN BITCOIN WE TRUST

Max Keiser: Buy Bitcoin to Help Your Family When the Global Economy Collapses (Exclusive Interview)

If you want to help your friends and family once the traditional system collapses, buy bitcoin – advised Max Keiser.

With the largest Bitcoin conference to date taking place in Miami, CryptoPotato had the chance to speak with one of the most prominent BTC proponents – Max Keiser. During the interview, the host of the Keiser report talked about the remarkable difference between the first Bitcoin conference in Prague ten years ago, price movements, crypto sentiment, and more.

What a Difference Ten Years Can Make
Keiser, who has been among the most well-known BTC bulls for over a decade, spoke about the general mood shortly before the start of the 2021 Bitcoin conference. He went back ten years to the first such event in Prague, which was “dominated by tech guys, coders, hackers – about 40 people were there.”

He compared it to now when official numbers say tens of thousands of people will be in attendance in Miami. Moreover, Keiser noted that even the recent price drops in the market, which drove the primary cryptocurrency from $65,000 to $30,000 in weeks, cannot change the positive vibes.

He referred to recent reports showing that mostly short-term holders dumped their coins during the crash while long-term investors, miners, and institutions kept accumulating. This only goes to show that “real players are here to stay.”

They won’t be deterred by FUD coming from Elon Musk, China, rumors, and more, Keiser added. Just the opposite, he believes that Bitcoin will ultimately prevail and keep attracting new people to itself.

Miami is Just the Start
Keiser spoke about the city of Miami and its pro-Bitcoin mayor, Francis Suarez. As reported, Suarez has displayed a highly positive approach towards BTC and even plans to turn the town he runs into a Bitcoin hub.

The host of the Keiser Report noted that more and more mayors, senators, and politicians will get involved in the following years. Thus, Miami will be the start of a new trend until it becomes a “federal mandate or law.”

He also outlined another city – Austin, Texas – which is “Bitcoin centric” as well.

Buy Bitcoin to Help People Later
While speaking about the retail investors that enter the BTC space when it goes into mainstream media, and its price has skyrocketed, Keiser said that long-term investors should not worry about them yet.

Furthermore, he argued that Bitcoin investors should not be concerned with those who have chosen to buy altcoins – shitcoins – rather than the largest digital asset.

Instead of thinking about them, though, BTC holders should be focused on accumulating more portions. Then, they will be able to help their friends and family survive once “the US dollar and the global economy has collapsed.” That’s why investors would “want to have as much Bitcoin as possible. That will be the only thing left.”

Focus on Hash Rate, not USD Price
On the question of what’s his price target, Keiser, who previously predicted a price tag of $220,000 by the end of the year, said that hodlers actually should focus more on how the hash rate grows in time.

The hash rate is the metric that shows the amount of computational power miners put in the network to validate transactions. The higher the hash rate goes, the more robust the blockchain is.

Aside from a few fluctuations, the metric has also been impressively increasing in the past several years to new all-time highs, showing that more and more miners prefer putting their devices to work on the BTC blockchain.

“Hash rate is much more consistently moving in a higher direction. In my view, it’s a lot more important metric because it shows to what extent Bitcoin is going into the traditional legacy system because it’s taking energy away from these other things.” – Keiser concluded.

Read more: CryptoPotato

Who benefitted the most from Bitcoin and how?

Bitcoin, the world’s largest cryptocurrency, finally sustained a breach of its 2017 ATH on the 16th of December on the back of exponential price appreciation on the charts. However, it wasn’t done, not by a long shot. In fact, at the time of writing, BTC was valued at just over $34,000 on the charts, having risen to as high as $64,000 less than two months ago.

Now, while the degree of corrections in the said case has been understandably significant, the fact of the matter is Bitcoin, at press time, was still giving YTD returns of over 35%, with the 1Y change v. USD as high as 246%.

What this means is that brushing aside the obvious, exaggerated complaints of volatility, Bitcoin has once again proven its credentials as a store of value asset. This narrative is particularly powerful for crypto-holders in countries where citizens might not necessarily have access to high-performing assets.

It is in the context of the same that it’s worth looking at who benefitted the most from the world’s largest cryptocurrency’s bullish boom, with the same being the subject of Chainalysis’s latest report. Here, it’s worth noting, however, that the said report only looked at 2020’s realized gains. In light of the fact that 2021 saw BTC climb even higher, one can expect the figures for the same to be even higher.

Bitcoin price chart (Image: geralt/Pixabay)
Bitcoin price chart (Image: geralt/Pixabay)

The aforementioned report found that investors based in the United States made over $4 billion in realized Bitcoin gains over the course of the year, over 3x more than China, a development that probably came on the back of U.S-based exchanges noting huge inflows in the early part of the year, most of which appeared to have been realized by the end of it.

The more interesting findings, however, were down the charts. While everyone expected the United States and China to lead from the front, what wasn’t really expected was the contradiction in well-to-do economic metrics and Bitcoin investments, and by extension, Bitcoin realized gains.

Consider this – according to Chainalysis, countries like Vietnam and the Czech Republic are punching above their weight. Vietnam, a low-middle income country, while ranked 53rd on the GDP charts, was ranked as high as 13th for Bitcoin investment gains with figures of $351 million. Similarly, while the central European country was 54th on the GDP charts, it was 18th when realized Bitcoin investments were looked at.

On the contrary, there was some variation to this juxtaposition too, with India being the prime example. The world’s fifth-largest economy with a GDP of $2.9 trillion was ranked a “lowly 18th.” Chainalysis attributed the same to,

“This may be a result of the Indian government’s historical unfriendliness to cryptocurrency.”

Here, it should be underlined that such unfriendliness was seen in countries like Turkey too, with the Erdogan-led government and the central bank regularly cracking down on crypto-holders and entities dealing with them. Even so, the nation-state was ranked 16th with respect to realized Bitcoin gains for 2020. It can be assumed that this might not be the case in 2021, especially since recent actions have shaken the local community’s confidence in the asset class.

Read more: AMB Crypto

Square and Blockstream to Launch a Solar-Powered Bitcoin Mining Facility

A solar-powered Bitcoin mining facility will come to the United States courtesy of Jack Dorsey’s Square and Adam Back’s Blockstream.

Jack Dorsey continues to display his support for the Bitcoin network, this time through the financial services company he runs – Square Inc. The firm has partnered with Blockstream to build an open-source, solar-powered BTC mining facility.

Solar-Powered Bitcoin Mining Coming in the US
Bitcoin mining became a hot topic within and outside the cryptocurrency community ever since Elon Musk cited the asset’s energy consumption levels as the primary reason why Tesla dumped BTC payments for its products.

Although it has been less than a month since then, numerous organizations and prominent individuals have already taken steps to address these concerns, including the establishment of the Bitcoin Mining Council.

The latest initiative comes from Blockstream and Square. The two parties have teamed up to create an open-source, solar-powered mining facility at one of Blockstream’s mining sites in the US.

They vowed to stay transparent through the entire process by sharing details of the project economics and “the knowledge gained from building a Bitcoin mine powered by renewable energy.”

Bitcoin Electronic Money (Image: MaxPixel)
Bitcoin Electronic Money (Image: MaxPixel)

Square and Blockstream aim to “raise awareness and show how Bitcoin mining in conjunction with renewable energy can help drive the clean energy transition.”

To do so, Blockstream will launch a free access dashboard showing real-time metrics of the project’s performance, including bitcoin mined and power output.

“We are hoping to demonstrate that a renewable mining facility in the real world is not only possible but also empirically prove that Bitcoin accelerates the world toward a sustainable future.” – said Chris Cook, Blockstream’s CIO and Head of Mining.

Square Invests $5M
The financial services company said it will invest $5 million in the facility, while Blockstream will provide the necessary infrastructure. Square’s Global ESG Lead, Neil Jorgensen, indicated that the project will “serve as an ongoing, transparent case study that will allow us to all learn together the specific unit economics of clean energy Bitcoin mining.”

Thus, Square has doubled down on its support for the primary cryptocurrency. CryptoPotato reported previously that the firm put BTC on its balance sheet by allocating $50 million.

Additionally, the company’s CEO, Jack Dorsey, has openly praised and outlined the significance of the Bitcoin network. The latest such example came just days ago during the 2021 Bitcoin Conference, where he called BTC the most important work in his lifetime. Furthermore, he said he would leave Square and Twitter for Bitcoin if it needed him.

Read more: CryptoPotato

Bitcoin Whale Who Dumped at Price Top is Buying the Dip Now

Bitcoin whales have started accumulating again and one particular whale that dumped a major share at the near-perfect top was seen buying again. Whales buying and selling is seen as a major market sentiment indicator as these whales often dump on market in anticipation of a price crash and start buying when they believe the market has reached a potential price bottom. Thus, the current buying spree seen among whales could indicate Bitcoin price bottom might be near.

Bitcoin price registered its first red monthly candle in May this bull season, a month that saw the price fall 50% from the all-time high of $64,685. BTC is currently trading just above $36,000, consolidating under 40,000 for nearly three weeks now. The coming month could see a possible trend reversal after breaking the key resistance of 40,000 and whale accumulation could become the possible catalyst.

Bitcoin Cryptocurrency (Image: MaxPixel)
Bitcoin Cryptocurrency (Image: MaxPixel)

The first week of May saw the crypto market bleed more than $500 billion of its $2 trillion market cap. While analysts have been predicting a market sell-off of such magnitude for quite some time owing to continuous 5 months long bullish momentum, the correction took many by surprise.

Bitcoin Fundamentals Strong to Carry the Bull Market Further
Every bull market be it from 2017 or 2013 has moved in phases followed by pullbacks and correction. Even during the 2017 bull run, the market has registered 4 major corrections in upward of 40%, thus crypto veterans who have seen previous cycles are confident that the current market correction is not the price top for Bitcoin.

Another reason for the current market sell oft was attributed to high leverage over trading and several FUDs including the Chinese ban on crypto trading and mining hitting the market at the same time. Many new traders fell prey to these FUDs and panic sold their Bitcoin.

Read more: CoinGape

The Most Profitable Signal In Bitcoin Is Back And About To Trigger

Bitcoin price is still down 40% from recent highs, forcing investors to face the reality that the bull run could be over. And while that scare and related selloff certainly shook out even the strongest of hands, those that are still holding could end up reaping enormous profits.

That’s because even though things appear to be extremely bearish at the moment for crypto, the most profitable buy signal in Bitcoin history is about to trigger. Here’s a look at what this means and why the last signal in each bull market is the strongest of them all.

Bitcoin Hash Ribbons Show Miner Capitulation, Buy Signal Is Coming
The first ever cryptocurrency has had its most profitable year on record, tripling in value within the first three months of the year. After a shocking move up, however, the market corrected and it caused chaos in newcomers to the volatile asset class.

More than 50% was bled out of Bitcoin price in just days following the local top – enough downside to question if it was the top of the bull market itself. Several indicators say as such, but the masses deny any chance of that happening – $100,000 BTC or bust.

Image by VIN JD from Pixabay
Image by VIN JD from Pixabay

However, stubborn as they may be, those with so-called diamond hands might end up with profits worth their weight in the precious gemstone.

What The Most Profitable Signal In Crypto Means For The Bull Run
The chart above shows the “hash ribbons” created by crypto fundamental expert Charles Edwards, which currently indicate that BTC miners are capitulating.

During selloffs, miners are forced the sell coins to fund operations. In theory, Edwards’ tool denotes when that’s happening. It also has a very fortunate side effect of being the most profitable buy signal in crypto history.

In the past, the last buy signal of each cycle led to another 8,000% and 3,500% respectively. Each cycle had a number of buy signals before the grand finale, but it is the last signal that gives the indicator its reputation of profitability.

Past buy signals from the current market cycle all have resulted in upside worth bragging about. After the December 2018 Botton, BTC rose by 300% and the most recent signal resulted it more than 500% returns.

With the cryptocurrency already at $35,000 per coin and only now about to trigger this monumental buy signal, how much further could the cryptocurrency climb?

The above chart shows an example of how only another 1,000% is necessary to reach $300,000 per BTC – an ROI which is meager to what the hash ribbons called out ahead of time during past bull rallies.

Read more: BITCOINIST

Five Signs That The Bitcoin Bottom Is In

Bitcoin price was slashed in half during the month of May, leaving today as the last day for bulls to make a stand and undo the worst monthly on record.

Even if the blood stain is left behind on the price chart for good, that doesn’t mean bulls still can’t pull off an upset and push prices higher. Here are five signs that Bitcoin price has bottomed out, or will be soon.

The Signals Showing The Bitcoin Bottom Is Near
Just as extreme bullish sentiment and exuberance around mid-April was the local top of the 2021 rally so far, the current level could also act as the bottom now that sentiment has shift to the polar opposite.

Contrarian investors and traders suggest buying the fear or blood in the streets, but that’s still not the reason to think the bottom is in.

Rather, technicals on nearly all timeframes point to a reversal in the making. The first ever cryptocurrency is forming a bullish divergence (above) while at daily support. The bounce happened once the Relative Strength Index hit oversold levels.

Image by 3D Animation Production Company from Pixabay
Image by 3D Animation Production Company from Pixabay

The daily LMACD is also turning upward, showing that bulls are attempting to regain momentum on daily timeframes after a month of mayhem.

Moving up to a higher timeframe, Bitcoin price has also bounced at a rising trendline of RSI support on the three-day chart (below).

But Wait, There’s More Reasons To Be Bullish On BTC
If that’s not enough to believe there’s a low-timeframe reversal in the making, on higher timeframes there’s still many more reasons to be bullish.

The rarely-looked-at two-week timeframe shows that Bitcoin fell to the middle-SMA on the Bollinger Bands. During the last bull market, the line was never lost. In fact, touching it resulted in the finally impulse upward.

The recent push down also caused Bitcoin’s most profitable buy signal to indicate “capitulation” in BTC miners. Past bull markets saw more than 8,000% and 3,500% after the last buy signal appeared per cycle.

Nearly every time the signal appears, more upside is on the way. So why would this time be any different?

With so many signals stacking up, chances that the cryptocurrency is near the bottom are becoming more likely. Drawdowns post buy signal are still common, however, the potential reward has historically always outweighed the risk in terms of ROI versus loss.

Read more: NEWSBTC

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