Grayscale: On-chain Metrics Show Bitcoin Is Undervalued, But Has Not Yet Reached Previous Cycle Lows

BlockBeats News, June 10th, according to the latest report "Is Bitcoin Cheap Yet?" released by Grayscale Research Director Zach Pandl, as the Bitcoin price fell below $60,000 and hit a new low in this cycle, a comprehensive assessment of various on-chain valuation metrics indicates that Bitcoin is currently in an undervalued state. However, the valuation attractiveness is still weaker than the previous market cycle bottoms (such as post-FTX collapse).

The report points out that a comprehensive valuation model composed of three on-chain indicators – NUPL (Net Unrealized Profit/Loss), Price/CVDD, and Market Cap/Thermo Cap – shows that the Bitcoin price is significantly below long-term average levels. However, Grayscale believes that the magnitude of the decline in this bear market cycle may be shallower than in previous cycles, due to reasons including a relatively moderate increase in the previous bull market, as well as market structure improvements brought about by the launch of spot ETFs, wealth management platform allocations, and institutional adoption.

Regarding the future trend, Grayscale believes that investors should focus on two short-term catalysts: the progress of the "CLARITY Act" in the U.S. Senate, and whether high-leverage Bitcoin holders can stabilize their balance sheets. The report states that institutions remain optimistic about the eventual passage of the CLARITY Act; however, it is predicted that there is still significant uncertainty in the market regarding the outcome. The current price level provides a dollar-cost averaging (DCA) opportunity for long-term investors, while more short-term traders may choose to wait for further clarity on the CLARITY Act before making decisions.