Bitcoin On Track For $1 Million Per BTC “Fair Value”, Analyst Says

One analyst explained that Bitcoin’s “fair value” appears to be on track to hit the $1 million milestone by 2035.

The total number of Bitcoin users can predict future fair value trends

new post Analyst Willy Wu discussed on X what the future fair value of Bitcoin will be based on the growth curve of the total number of users on the network.

“Total number of users” here refers to the total number of investors present in the BTC space. This metric is often equated with the total number of addresses on the network that hold balances, but in reality this is not the most accurate method since many investors own multiple wallets. there is no.

To estimate the adoption curve, Woo looked at all the previous studies done on user numbers. The analyst shared the chart below in a post on X a few days ago.

The adoption curve of the cryptocurrency over its entire history | Source: @woonomic on X

The first half of the graph here is based on Glassnode’s on-chain clustering of addresses into “entities”. An entity is a collection of Bitcoin wallets that Glassnode has determined belong to the same investor.

In the next part of the curve, Woo added data from Cambridge and Crypto.com on verified exchange users. Finally, the analysts have predicted the resulting growth rate in the future.

According to this curve, there are currently a total of 426 million Bitcoin investors, and the number is estimated to reach the 500 million milestone by October of this year. Interestingly, as the graph below shows, the price of cryptocurrencies has fluctuated along this total user growth curve over the years.

Bitcoin price and penetration rate

The adoption curve of the asset compared against its price action | Source: @woonomic on X

More specifically, price fluctuations around this cryptocurrency’s adoption curve have been present since 2012. This means that for the period before 2012 (shaded area of ​​the graph), this pattern does not fully apply.

“In the early days, the price was slow to catch up with the number of users, and BTC didn’t even have a price until the 1,000th user arrived,” Wu points out. “Price Discovery started with early markets such as Liberty Standard and Mt. An exchange has been established.

Now, if Bitcoin’s growth curve is also considered as a guide to its future value, analysts predict that by 2035, the fair value of each Bitcoin will be $1 million. “Fair value” here is based on the line around which the asset lies. It’s been oscillating.

From the chart, we can see that BTC has historically increased distance above this line during bull markets. Therefore, the peak value of a future bull market could be significantly higher than this fair value.

It remains to be seen how the price of cryptocurrencies will develop over the next few years, and whether the relationship between the price of cryptocurrencies and the total number of users will continue to be maintained.

BTC price

Bitcoin has observed a decline of more than 8% over the past week, with the price falling to $58,600.

bitcoin price chart

Looks like the price of the coin has registered a sharp drop recently | Source: BTCUSD on TradingView

Featured image from iStock.com, chart from TradingView.com

Disclaimer: This article is provided for educational purposes only. This does not represent NewsBTC’s opinion on whether to buy, sell, or hold an investment, and investing naturally involves risk. We recommend that you do your own research before making any investment decisions. Your use of the information provided on this website is entirely at your own risk.

Related Article

0 Comments

Leave a Comment