By Willy Woo @ woobull.com
[Editors Note: On my youtube channel I often talk about how I believe the Bitcoin price is undervalued against the Metcalfe value of the Bitcoin Network.
As a reminder Metcalfe’s Law states the value of a network is proportional to the number of members squared.
In my opinion the reason for this divergence and disconnect was the due to the cataclysmic Mt.Gox Bitcoin exchange collapse in Mid 2014, which the price has still yet to recover from.
Based on this, it could be argued that now may be a good time to invest in Bitcoin as it appears to still be trading at a discount to its underlying net asset value or Metcalfe value.
In addition, shown on the chart above, the ratio of Metcalfe value compared to the recent price was recently sitting at 10-1. Based on this we can predict that for the current price of Bitcoin begin to come back into line with the Metcalfe value of the Network ,we could see prices move up to and around the $2500 – $5000 mark or around $40bn-$80bn.
Below is Willy Woo’s analysis on Bitcoin Metcalfe value…
Via Justin Lee @ Bloomberg.com
- “Bitcoin rose to an almost three-month high amid a surge in volume as the yuan extended a six-year low, bolstering Chinese demand for alternative assets”
- “As the yuan enters a path of depreciation, investors will consider investing in assets that can preserve value and hedge risks,” said Zhu Jiawei, Beijing-based chief operating officer at Huobi, one of the largest Chinese bitcoin exchanges”
Bitcoin hits all time high market cap! A look at all the Fundamentals and Technicals driving this strong bull market and price breakout in the Bitcoin market.
A Fundamental & Technical analysis of Bitcoin, Litecoin & Ethereum,
Plus a review of all the biggest Bitcoin developments in the last month, which are adding value and utility to the Bitcoin currency and network.
An overview of the Bitcoin and Precious Metal Markets in Q1 2016 , including technical analysis and a look at Central bank actions.
I also ask the question is Bitcoin severely undervalued?