The popular crypto strategist who continues to build a following with timely Bitcoin (BTC) analysis says the king crypto is grossly undervalued.
In a new interview on the Real Vision Crypto channel, Cowen says that crypto assets are massively undervalued based on the logarithmic regression model.
“This chart is something I’ve shown a few times in the past. The blue line is the total cryptocurrency market capitalization. The red line is what’s called the fair value logarithmic regression trendline.
The whole idea is that the fair value of the asset class [crypto] increases monotonically with time and we sort of oscillate around that fair value.
Right now, the data would suggest that we’re about 50% undervalued compared to where the fair value is.”
Although crypto’s current valuation may look attractive to long-term investors, Cowen warns that the asset class could still fall an additional 15%.
“But [the chart] also suggests too, that major bottoms usually occur closer to say 60% to 65% undervalued before we can really sustain another bull market…
We still need a bit more time before we can really claw our way out of this bear market.”
Turning to Bitcoin, Cowen says that the flagship crypto asset will likely take over 14 months before it can surge back to fair value.
“Bitcoin’s price has always been at its fair value at its halving.
So every single bear market we go below the fair value and then by the time we get to the next Bitcoin halving that is where the price is.
So I mean in order for us to get back up to the fair value, I would say it’s likely going to occur, my guess would be 2024. Sometime early 2024 is my guess.”
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