The current price of bitcoin (quotation BTC) is in line with its real value? It seems like an endless discussion not only in the bitcoin community and cryptocurrency enthusiasts, but also among economists, analysts and traders who see bitcoin as more or less than its price reflects.
What is the real value of the BTC?
In his most recent newsletter on the world of cryptocurrencies, analyst Scott Melker (The Wolf of All Streets) devotes a short section to this topic. And he does it right in the middle of a time when the market appears to be bearish on BTC, which has not been able to consistently recover its price since the beginning of the year.
But for Melker, BTC's price doesn't really match its value. And, in fact, he argues that there has been a shift in the narrative around cryptocurrency in recent times that supports this claim:
Bitcoin's value generally exceeds its price for a variety of reasons, many of which are finally gaining traction in the mainstream narrative: digital gold, store of value, deflation, hedging - Scott Melker, market analyst.
The specialist claims 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 actions. In short, the functioning of bitcoin as a monetary system in contrast to the fiat money system, issued and controlled by governments, against a new monetary technology that does not depend on the judgment of any individual or institution, is resistant to censorship and open to all.
The long-term market appears to agree with this view, with BTC prices rising steadily, and even reaching new long-term plans, regardless of volatility and short-term slumps.
This is why billionaires and corporations are trying to expose themselves […] The true value of Bitcoin still has a long way to go before it is properly valued. Value is Everything - Analyst Scott Melker.
Value, price and the Netflix case
Shares of the company (NFLX) plunged 25% in minutes after the entertainment company reported losing more than 200.000 subscribers in the first quarter of this year.
The situation worsened even further after the release: more than 35% less during the trading day of Wednesday April 20 for NFLX, in the TradingView data. Compared to bitcoin, the analyst argued that at one point the biggest criticism against the asset was its volatility. That is the risk of sudden movements, like the one that Netflix had, unexpectedly.
But… it's not just that this can happen in any market besides bitcoin. The text argues that we have actually seen drops like this in large companies in recent months, even "as retail traders have no access to their accounts and no ability to sell."
Unlike markets where corporate stocks or other traditional assets are traded, Melker argues, bitcoin traders have the ability to exit or enter positions at any time. In other words, the risk is mitigated because you can cut your losses at times like this.
