Bitcoin (BTC) Market Value Compared to Gold Shows the Asset May Be Severely Undervalued

PlanB, the founder of the Bitcoin stock-to-flow model, an analytical tool designed to spotlight Bitcoin's value based on scarcity levels

PlanB, the mind behind the Bitcoin stock-to-flow model, shared a chart comparing Bitcoin's market value to other traditional assets, highlighting the cryptocurrency's potential for surging in the near term.

According to the data shared by the Bitcoin proponent, the asset appears to be severely undervalued at this time, with its long-standing rival, Gold, outperforming. While Bitcoin's overall market value sits at $2 trillion, Gold's market value is a staggering $20 trillion.

However, considering the scarcity levels of both assets, PlanB noted a significant disparity. Bitcoin's scarcity, measured by the S2F-ratio, is 120 years, while Gold's S2F-ratio stands at 60 years.

Anticipating a potential surge in market value, PlanB expressed optimism for the near term. "Let's see what this halving cycle will bring," he asserted.

The Bitcoin halving event, which occurs once every four years and reduces circulating Bitcoins by 50%, was last observed on April 20th, 2024, with block rewards decreasing to 3.125 BTC.

Post-Bitcoin halving expectations are usually bullish, as historical data displays a massive price value increase in both long- and short-term cases. In 2016, Bitcoin experienced a surge of over 271% in price value following halving.

Furthermore, in 2020, the asset recorded the highest post-halving price rally, with gains exceeding 234%. Bitcoin has since seen a 36% increase from last year's $63,825 pre-halving price in April.

However, it's crucial to observe how macroeconomic factors influence price in the long term.

At the time of writing, Bitcoin is trading at a press time price of $87,361. The asset remains in a critical position, as liquid long positions reached $400 million.

According to market analyst Amr Taha, BTC holding above the short-term realized price could indicate an increase in demand. Conversely, a breakdown below these levels suggests a potential reversal.

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