Bitcoin

Ethereum is undervalued compared to Bitcoin ?

January 14, 2020 by Océane

Although it is commonly accepted that the Bitcoin is the digital gold, Nate Maddrey, the senior research analyst of Wedge Metrics, has argued that Ethereum is not measured at its fair value relative to the crypto-currency number one.

A super year for the Bitcoin

Commenting on the performance of Bitcoin and other altcoins the last year, Maddrey has made the remark that the bitcoin has appreciated by around 90%, whereas Ethereum has been down nearly 5%.

“This is one of the first years where we have really seen this kind of separation between the Bitcoin and Ethereum “, he said.

According to him, this super-performance would have been the result of the bear market. In fact, during periods of economic slowdown, people tend to get rid of the crypto-currency at low value and selling them, for the benefit of those who are most influential.
Through this scheme, the bitcoin has always been crowned as the ultimate store of value.

“I think we’re beginning to see real data convincing “, he argued.

A performance, measured through the MVRV

Not only the bitcoin is gaining ground in terms of value, but he has also shone in the ratio of MVRV, that is to say the ratio between the market value and the realized value.
The ratio MVRV of bitcoin would have been about 1.3 at the end of the year, which contrasts with that of Ethereum, which is maintained at 0.61.
By way of interpretation, this ratio expresses, in principle, an overview of the health of the portfolio of investors means. If the ratio is greater than 1, this means that the market capitalization is greater than the capitalisation carried out.
In other words, if the average investor decides to sell the asset, it would sell with profit. In the opposite case, if the MVRV is less than one, the average investor would sell at a loss.
In practice, this would imply, then, that investing in Ethereum (ETH) would inevitably lead to the loss.
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Jeremiah Faber

Jeremiah Faber

Jeremiah is an explorer by heart – both in the physical and the digital realm. A traveler, Jeremiah continues to visit new places throughout the year in the physical world, while in the digital realm has been instrumental in a number of Kickstarter projects. Technology attracts Jeremiah and through his business acumen has gained financial profits as well as fame in his business niche.