The price of Bitcoin has risen so quickly in recent months that many are convinced that the next bull market has already begun. For some, this will be a reason to invest even more. But the asset manager Fidelity is less positive. In their opinion, Bitcoin can no longer be called “cheap”.
Fidelity is more cautious on Bitcoin
Fidelity is a traditional asset manager and one of the largest in the world. Since the beginning of January, it has also been the happy owner of one of the new American spot ETFs for Bitcoin, FBTC. This fund has now also developed into one of the largest in the world, but Fidelity itself is nothing special for the time being bullish more about Bitcoin.
In the Q1 2024 Signals Report, the company writes that there was not a single day in the first quarter when the largest cryptocurrency was “cheap.” This is striking because after a correction of more than 20% earlier this year, the price found its bottom at around $39,000. Since then, the stock has risen about 90% to a high of $74,000. This suggests that the price must fall very quickly to become undervalued again.
This conclusion is based on the “Bitcoin scale‘ or ‘Hashrate measure’. For the medium term, which refers to the next 1 to 5 years, the rating has now been downgraded to “neutral”.
Fidelity relies on several factors, such as investors’ net position and the number of profitable addresses. The latter is 99% positive, which is theoretically unfavorable for traders and drags down the valuation.
Fidelity bullish on Ethereum
The report also looks at the short and long term, for both Bitcoin and Ethereum (ETH). In the short term, the three indicators for both assets are green, but in the long term two indicators are also red for Bitcoin. Both the number of new addresses and the total number of active addresses are not very high.
Fidelity is more optimistic about Ethereum. 8 of the 13 indicators for the largest altcoin are green, while only one is red. The Dencun upgrade has significantly improved the fundamental properties of this network, the asset manager concludes.
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