Bitcoin Selling Off For Pennies? Bitwise says it should cost $270,000.
Gold prices are at all-time highs. Global money flows keep growing. Yet Bitcoin lags way behind. This gap makes no sense. Why is the top crypto, designed to fight money printing, not reacting?
A new report from Bitwise uncovered a massive value gap. BTC’s price is totally disconnected from the growth of cash worldwide. Is this a market glitch? Or does it mean a huge opportunity is forming? The shift could happen quickly.
Bitwise found Bitcoin is behind the global money supply by 66%. This estimate implies a fair price near $270,000. They reached this number by tracking BTC against the global M2 money supply. That supply currently sits near $137 trillion. This is a historic low point for Bitcoin compared to basic economics.
Bitcoin faces a historic undervaluation, according to Bitwise.
The asset manager dedicated its latest report to Bitcoin’s macro picture. It revealed a major undervaluation due to the global money environment.
The Bitwise model shows a 66% undervaluation of BTC. This suggests a price of $270,000 instead of today's price below $100,000. Global cash is expanding fast. We have seen over 320 rate cuts globally in the last two years. The US Federal Reserve ended its quantitative tightening program on December 1st. Japan is launching a $110 billion stimulus plan. Canada has started printing money again. China is pushing a $1.4 trillion fiscal plan.
Bitwise argues that the market ignoring these factors is rare. It creates an asymmetric chance for investors. If Bitcoin simply matches its cash-flow anchor, the price could jump by 194%. Bitcoin has always been the best tracker of money dilution. This is because it has a fixed supply limit.
Other analysts point out that gold took most of the inflation hedge money this year. This hurt Bitcoin flows. Jurrien Timmer from Fidelity notes that Bitcoin is lagging behind gold. This applies to both price speed and risk-adjusted returns. Gold shows better returns for the risk taken right now. Timmer suggests this difference may reverse soon.
Timmer remains careful about the long view. He says Bitcoin still aligns with its long-term adoption curve. He also sees that returns are less wild as the asset matures. He calls Bitcoin the young brother of gold in its prime. This means the fundamentals are strong. However, market cycles are now slower and more institutional.
Grayscale sees Bitcoin hitting record levels by 2026. We wait to see if the market confirms this timing. Bitcoin faces major uncertainty, sitting at a critical crossroads.