Prominent Crypto Economist Tuur Demeester: Price of Bitcoin (BTC) Is Vastly Undervalued Today
The crypto world unanimously celebrated when bitcoin broke above $6,000 for the first time since 2018 a few hours ago. It was a sign that the bear market is finally coming to a close and we can usher in a new wave of progress and adoption. The bear market had been brutal with many firms closing down and many investors losing some level of confidence. However. according to Tuur Demeester, bitcoin is actually being significantly undervalued and the end of the bear market could signal larger financial adoption.
— Tuur Demeester (@TuurDemeester) May 7, 2019
These statements were made during an interview with Peter McCormack where Tuur Demeester spoke about bitcoin at length. According to him, bitcoin has been undervalued while still being used as a benchmark for performance and has much greater potential.
“If you look at the blockchain and the Bitcoin that is being moved and then compare it to the current price, you will get something that is called the unrealized profit and loss. There is an assumption that when BTC is moved it is sold, and this event is called a value realization event. It is just that the owner had the opportunity to liquidate their Bitcoin and that is why they took it,”
He added that the bitcoin and crypto market, in general, are very sentiment-based and that patterns were noticed in 2013 and 2014 when a lot of unrealized profit took place and thus, the market inclined towards green as positive sentiment set in. When the market was in the red, investors moved away due to fear and the price of bitcoin dropped significantly.
Not A Bull Run
While the price is certainly high at the moment, he was quick to note that this is not a bull run yet but is the end of the bear run that has lasted up to six months this time. He says that bitcoin is still in the accumulation stage and will remain so until bitcoin trades around $6,500 and that the market will still need to go through some painful maturation period. Most of bitcoin is concentrated in the biggest exchanges, which is rather dangerous in the event of theft. As such, the supply of bitcoin and cryptos in general needs to circulate.
“I am not ready to say yes, that we are in a new bull market but I do definitely think that we are in the last phase of the current bear market,”
While it is easy to look to past bitcoin trading patterns to determine what will likely take place in the future, Tuur Demeester advised that we should not do so as the market can never truly be replicated and while it may give a hint of what might come, everything is essentially a probability. He also warned against using any single factor such as price to determine the potential long-term behavior of the market.
Looking To The Future
On a more positive note, Tuur Demeester stated that the current accumulation of bitcoin and the recovery it has experienced is a sign for the future, particularly in terms of bitcoin capturing a larger financial market exposure. This can be seen in the use of crypto indices on the NASDAQ and many more mainstream financial institutions getting a piece of the crypto action which is essential for bringing it into a wider market.