Bitcoin Still 'Undervalued' Even As Institutional Investor Interest Grows

# Bitcoin's Recent Rally Indicates Undervaluation Amidst Growing Institutional Interest Bitcoin (BTC), buoyed by increasing institutional investment, remains undervalued despite its recent price surge, according to a Cointelegraph report dated April 29. Fidelity Digital Assets echoed this sentiment, suggesting that Bitcoin is underpriced with a promising medium-term outlook. Additionally, weaker U.S. job openings data for March 2025 has heightened speculation about potential Federal Reserve rate cuts, further enhancing Bitcoin’s appeal. # 'Bitcoin Yardstick' Highlights Undervaluation Fidelity Digital Assets identified the undervaluation using its "Bitcoin Yardstick" index, which compares Bitcoin’s market capitalization to its hash rate (a measure of mining difficulty and network security). A lower yardstick score suggests Bitcoin is inexpensive relative to the security of its network. During the first quarter of 2025, the yardstick ranged from -1 to 3 standard deviations, stabilizing after an overheated previous quarter. The frequency of days exceeding +2 standard deviations fell from 22 to 15, with no days surpassing +3 standard deviations. Fidelity described Bitcoin as entering an "acceleration phase," potentially paving the way for new all-time highs, though they cautioned about possible price corrections following significant gains. On-chain data indicates a rise in long-term holder dominance, with illiquid Bitcoin supply increasing from 61.50% to 63.49%, while liquid supply decreased by 4%. # BlackRock's iShares Bitcoin ETF Records Massive Inflows On April 28, 2025, BlackRock’s iShares Bitcoin Trust (IBIT) ETF saw a significant inflow of $970.9 million, marking the second-largest daily inflow since its launch in January 2024. Since April 22, over $4.5 billion has been funneled into IBIT, securing a 51% market share amid outflows from rival ETFs like Fidelity's FBTC and ARK Invest’s ARKB. # Bitcoin Boosted by U.S. JOLTS Data The U.S. Job Openings and Labor Turnover Survey (JOLTS) for March 2025 reported 7.19 million job openings, a decline from 7.57 million in February and below the forecast of 7.48 million. This suggests a cooling labor market, raising expectations of Federal Reserve rate cuts. Such cuts typically weaken the U.S. dollar, thereby making Bitcoin and other risk assets more attractive. Economist and Bitcoin analyst Alex Krüger noted that the JOLTS data provided short-term momentum for Bitcoin. He remarked, “Bitcoin, combining traits of gold and a risk asset, benefits from rate cuts and other favorable conditions.” On social media platform X, Krüger pointed out that while markets concentrate on corporate earnings and hawkish signals, Federal Reserve Chair Jerome Powell might address the timing of rate cuts at the upcoming FOMC meeting. He anticipates reduced economic growth in Q3 with accompanying market volatility, but asserts that Bitcoin’s unique risk-reward profile gives it an advantage over overbought altcoins.