Grayscale Says Bitcoin Trades Below Long-Term Value

TLDR

• Bitcoin fell below the $60,000 level and reached a new cycle low.
• Grayscale said on-chain data suggests Bitcoin trades below its long-term average.
• The firm used a composite indicator based on three valuation metrics.
• Metrics include unrealized profit and loss and coin-days destroyed benchmarks.
• Grayscale stated current prices remain above post-FTX crash discount levels.

Bitcoin fell below $60,000 and reached a new cycle low this week. Grayscale addressed whether Bitcoin now trades at discounted levels. The firm answered yes, yet it said prices remain above past crash extremes.

Bitcoin On-Chain Metrics Signal Undervaluation

Grayscale based its view on a composite on-chain valuation indicator. The firm combined three data points into one weighted measure. This measure compares current pricing against historical network behavior.

The first input tracks aggregate unrealized profit or loss across Bitcoin holders. This metric compares the market price with the on-chain cost basis. It shows holders now sit closer to break-even levels than recent peaks.

The second input measures price against a long-term benchmark. That benchmark relies on coin-days destroyed across the network. This data reflects the spending patterns of long-held coins.

The third input evaluates price relative to historical network valuation trends. Grayscale said the blended result places Bitcoin below its long-term average. The firm wrote that Bitcoin trades at levels that suggest undervaluation.

However, Grayscale noted that prices have not reached prior crash lows. The firm cited the post-FTX period as a reference point. During that time, metrics reflected deeper discounts.

Market Structure and Regulation in Focus

Grayscale stated that the current downturn may prove shallower than earlier bear markets. The firm linked this view to a muted bull cycle. It also pointed to changes in overall market structure.

The report stated that leverage levels will influence near-term price action. Large holders with borrowed positions may face balance sheet pressure. Forced liquidations could add selling pressure if leverage unwinds.

Grayscale also referenced the CLARITY Act in its report. The firm said regulatory progress could affect market direction. The legislation continues to move through the Senate.

The report stated that outcomes tied to the CLARITY Act could shape sentiment. Lawmakers have debated digital asset oversight under this framework. The Senate has not yet delivered a final vote.

Grayscale concluded that on-chain indicators currently support a value case. However, the firm tied future price stability to leverage conditions and regulation. Bitcoin traded below $60,000 at the time of the report.

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