Fidelity is still bullish on Bitcoin despite the turmoil
The Director of Global Macro at Fidelity, Jurrien Timmer, has said that Bitcoin could be cheaper than it appears. Analyzed on-chain data metrics show that the coin’s true value could be significantly higher than the current value.
Fidelity is bullish on Bitcoin’s price
Timmer posted a tweet on Tuesday, sharing a chart depicting Bitcoin’s price and the network ratio against the coin’s price in USD. The price/network ratio, also known as the NVT ratio, is calculated by dividing the price of Bitcoin by the total on-chain volumes.
When the price/network ratio is high, it could show that the asset is overvalued, and when the ratio is low, it shows an asset is undervalued. Timmer also said that the Bitcoin NVT ratio was at the lowest levels seen during the 2013 and 2017 bull markets, while the price has gone back to the lowest levels seen towards the end of 2020.
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The executive also said that the valuation of an asset was more important than the price. He also included a chart of the prices plotted against the non-zero Bitcoin addresses. The chart showed that Bitcoin’s price had gone below the average address growth curve of the network.
Another measure that Timmer also analyzed was the Bitcoin dormancy flow. The metric showed that Bitcoin was technically oversold. Dormancy flow is a metric that assesses the average number of “coin-days” destroyed after every transaction. The metric assesses how long the coins will stay dormant before the activity is restored.
Fidelity’s crypto plans
Fidelity is reputed for being bullish on Bitcoin for the long term. The asset management firm recently announced that its customers would be allowed to add Bitcoin to their 401(k) retirement accounts. However, the move has been criticized by politicians.
In January, Fidelity released a report saying that Bitcoin was different than all the other cryptocurrencies. While the asset manager viewed Bitcoin as a monetary product, other assets such as Ether (ETH) were venture investments.
The cryptocurrency market has been dealt a massive blow during the past few days. The macro-environment surrounding the crypto sector has triggered massive selloffs and reported liquidations for Bitcoin-collateralized loans.
One of the groups facing a liquidation risk is Celsius. Celsius is a crypto lending platform with more than $500 million in Bitcoin as collateral. The company was forced to freeze all customer withdrawals as they find liquidity to be used in financing its loan.
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