Is the current price of bitcoin (BTC) in line with its real value? It seems like an endless discussion not only in the community of bitcoiners and cryptocurrency enthusiasts, but also among economists, analysts and traders who see more or less in bitcoin than its price reflects.
In his most recent newsletter on the world of cryptocurrencies, analyst Scott Melker (The Wolf of All Streets) dedicates a brief section to this topic . And he does it right in the middle of a moment in which the market seems to be positioning itself bearish for BTC , which is unable to consistently overcome its price at the beginning of the year.
But for Melker, the price of BTC has no real correspondence with its value. And, in fact, he claims that in recent times there has been a change in the narrative about cryptocurrency that supports this claim:
“Bitcoin’s value typically exceeds its price for a variety of reasons, many of which are finally gaining ground in the mainstream narrative: digital gold, store of value, deflationary, hedging.”
Scott Melker, market analyst
The specialist states in his text that bitcoin “has always had a potential value that far exceeds the current price.” Especially for those who understand monetary policy and central bank action. In short, the functioning of Bitcoin as a monetary system in contrast to the system of fiat money , issued and controlled by governments; against a new technology of money that does not depend on the judgment of any individual or institution, is resistant to censorship and open to all.
In the long term, the market seems to agree with this vision, with a sustained increase in BTC prices, which has even been reaching new lows in the long term, apart from the volatility and falls in the short term.
“This is why billionaires and corporations seek exposure […] The true value of Bitcoin still has a long way to go before it is properly priced. Value is everything.”
Analyst Scott Melker
Value, price and the Netflix case
“The good news for investors is that an asset’s price almost always levels off with its value,” Melker wrote in the bulletin. In this regard, he alleges that large investors have historically used this maxim to earn billions of dollars.
“Investors study the value, not the price,” he said in this regard. And the recent behavior that we have reviewed in CriptoNoticias seems to support the statement. With more and more buyers who focus on accumulating bitcoins regardless of further price variations, even holding out when the market crashes.
Along the same lines about price and value, Melker referred to the case of Netflix. Shares of the company (NFLX) plunged 25% in a matter of minutes , after the entertainment company reported the loss of more than 200,000 subscribers during the first quarter of this year.
The situation has gotten even worse after the release: more than 35% drop during trading this Wednesday, April 20 for NFLX, in TradingView data . Compared to bitcoin, the analyst argued that at some point the biggest criticism against the asset was its volatility. That is, the risk of sudden movements, like the one Netflix has had, unexpectedly.
But… it is not only that this can happen in any market, beyond bitcoin . The text alleges that, in effect, we have seen falls like this in large companies in recent months, even “while retailers do not have access to their accounts or sales capacity.”
Unlike markets where shares of companies or other traditional assets are traded, Melker says, bitcoin traders have the ability to enter or exit positions at any time. That is, the risk is mitigated because you can cut losses at times like this.