Is Bitcoin currently massively undervalued?

[ninjagod]

The past few days/weeks has consisted of much uncertainty within the Bitcoin market due to the fact that people were unsure of whether or not a split was going to occur in Bitcoin.

However, when a large amount of support was shown for Segwit2x the value of Bitcoin suddenly soared upwards again.
This makes sense because it helped clear some of the uncertainty about what was going to happen to Bitcoin.
But, the value of Bitcoin has currently stopped skyrocketing and is now starting to level out again - near the peak price of the end of June.

This all makes sense but I am confused because, surely, now that Bitcoin has provided a solution to its scalability problem, shouldn't it be worth more than what it was at the end of June?

Also, some of you may say that the community is still a little uneasy about whether or not the miners will adopt BIP 141 (Segwit) but, based on statistics given by CoinDance, 97.7% of the past 144 blocks support BIP 141 (Segwit) so there shouldn't really be an issue there.

P.s I am new here so sorry if I have missed something or come across as naïve

[identifyuser]

I think bitcoin is undervalued. Just look at the news about bitcoin every day there are new projects where you can pay with bitcoin.

[Kprawn]

I think there is still a level of mistrust in the community towards the miners and how the two sides are going to react, once

everything falls into place. A guy like Jihan, is still on a power trip and he wants his own JihanCoin. The solution might also

just be temporary, depending on how these miners wants to shift their weight. 

[European Central Bank]

no.

value comes from more people and more use. not enough of either is here yet.

almost all of the price is in anticipation of more of the above.

in terms of future potential you could possibly say that. but then again if the potential goes unfulfilled you could say it's ridiculously overvalued right now.

[webtricks]

BIP91 locked in is very small factor in determining the price of Bitcoin. There are numerous factors affecting Bitcoin price at same time because every hodler has different view and assumptions about situation.
Economic laws and possibility has no relevance in Bitcoin market.
For say, users positively reacted to segwit2x locked in which causes price upward movement. But now upcoming BCC fork, withdrawal/deposit restriction by Bittrex and overall correction in crypto world is keeping price stagnant today!

[LeGaulois]

People are still waiting August 1 to see what will be going on. It's difficult to say if Bitcoin is undervalued with the situation we are seeing recently. Once all the drama is out we may start to see more people using Bitcoin and so as a snow ball it can boost the value.

[d5000]

In my opinion, there are some indications that the market wants to see higher prices - above all, that none of the dips after the $3000 high really could break the bull market - but is held back by the Segwit drama. It's about to finish, but there is still some uncertainty like Kprawn said.

But unfortunately, this sentence is still not true:

Bitcoin has provided a solution to its scalability problem

Segwit alone is only a short term solution and can ensure a growth similar to what we've seen in the past years (about 50% transaction amount growth per year) for about 2 years from now, and with Segwit2x, for 3-4 years. But the real innovation we're waiting for are working second layers (Sidechains with decentralized peg and Off-chain solutions like Lightning). Only if these milestones are achieved we can say that Bitcoin has solved the scalability problem.

That means that a massive, "justified" price increase is only to come when these issues are solved. Before that, everything is speculation that these solutions may come.

[alani123]

I don't think that bitcoin is in any way undervalued at any time. It's strictly valued based on demand and speculation might be a driving force behind its moves but it's only the subjective interests of someone that'd make em say it's undervalued.

[fabiorem]

Yes.

[richardsNY]

Honestly speaking, nope. Important factor is that we have various scenarios to focus on, plus the fact that things might not go according to plan at the time the hard fork (which is part of SegWit2X) kicks in. As long as we haven't 'fully' taken care of everything related to scaling, and the right implementation of SegWit, we should remain conservative. Bitcoin is a multi billion industry, which is exactly the reason various toxic elements might abuse the sensitive state of the market and miners to perform a nasty action, just to nurse their own greed. In short, being bullish on Bitcoin is well justified, but we shouldn't drop our guard.

[pumpmydump]

What were the drives behind the April/May rise? I would argue the main one was Bitfinex disabling fiat withdrawals, forcing users to convert their fiat into cryptos to be able to withdraw. At the time Bitfinex was trading $100-$200 over other exchanges and pulling all other exchanges up. We only got to see a slight correction when it reached the ATH at $3,000. Wouldn't you say it was already way overvalued back then? Compared to its use. The main force behind its rise was speculation, not use.

And now we still have uncertainty currently and ahead. Exchanges disabling deposits/withdrawals. Whether Segwit will work fine. The Bitcoin Cash hard fork coming on August 1st. Bitmain's possible hard fork on August 1st.

When most buyers are speculators, the market isn't undervalued, it is overvalued, and has the potential to come crash down hard. Sure long term if bitcoin comes to be a widespread alternative to fiat then the price will be justified, right now it isn't, in the sense that speculators won't hold to their bitcoins if too many of them start selling.

[~Bitcoin~]

When segwit2x will be activated than bitcoin will reach to value it should be which I think is more than $5000 per bitcoin. All those debate about block size and network clogging will be over when block size and its capacity will increase with segwit2x. More over we will have lightening network after segwit that will make it possible to make instant payments with bitcoin that might push price to above $10k. 

So yes bitcoin is undervalued right now.

[cryptohorsee]

No it isn't we need fresh blood in crypto to get gainz. But after all this mess with segwit, normal ppl are scared

[charlescoin]

You are completely right that the uncertainty is dying down and that should mean bitcoin is undervalued. However there is still some uncertainty lying ahead.

First of all the scaling issues are only temporarily fixed, second of all there is a hardfork planned in a few months that the community still hasn't reached consensus on adopting as per the New York Agreement which was only signed on by some 80%+ of mining power. If the rest of the bitcoin community doesn't get on board with this hardfork there could still be a chain split.

The point I'm trying to make is though segwit seems to be going through without problems, segwitx2 is still not set in stone.

So basically the uncertainty is reduced but not completely gone, yet I do agree with you that it is massively undervalued because the community has shown at least that it can eventually push things forward and the increased transaction throughput available now means we don't need to worry about full blocks and high fees for at least a year or 2.

[BitHodler]

Maybe in 10 years people will say ' I wish I invested in bitcoin back in 2017'

That has been the case since the very beginning, and will continue all the way till Bitcoin's ultimate high at some point in the far future.

I am glad that I chose to focus solely on hodling my coins at the very beginning. I have had the privilege to buy a decent number of coins below the $300 mark back in 2015.

Each time the price increases with another few hundred bucks, it puts a smile on my face. It takes a whole lot of patience and dedication to keep hodling without selling.

It would seriously burn me if I would look back at the price back then, and think why I didn't invest at sub $300 prices when I had the chance ~ buying and hodling makes you avoid dealing with that, no joke.

[alani123]

No it isn't we need fresh blood in crypto to get gainz. But after all this mess with segwit, normal ppl are scared

No such thing as fresh blood. People that joined in at the start of the rally are still in profit. Big investors like Rothschild are just now starting to get into assets like gbtc.

[Pearls Before Swine]

Maybe in 10 years people will say ' I wish I invested in bitcoin back in 2017'

Exactly.   At least that's what I'm betting on.  I got in late to the game, and already I'm kicking myself for not holding onto what I bought last year. The profit would have been enormous!

Undervalued,  though?   I hate that word, because it's a business journalism buzzword and usually means nothing.   I'd say bitcoin has big potential.   So yeah I guess you could call that 'undervalued'.

[European Central Bank]

That has been the case since the very beginning, and will continue all the way till Bitcoin's ultimate high at some point in the far future.

there is no ultimate high point. that's kind of the point. if people still want it it should in theory carry on gaining forever at least in terms of fiat currencies.

[Dr Bloggood]

I get what you are saying, OP. The ascent of the price was suppressed for some time because of the SegWit2x debate, and now it's resolved, shouldn't the price be much higher?

The price is already much higher than it was a short time ago at $1,900. Also, two reasons why it's not even higher:

1. August 1st is the big date in the head of the public. It's the date you can read about in mainstream media.

2. The hard fork is upon us now.

3. SegWit is not running yet.

I expect the price to rise steeply over August/September. That could start at the beginning of August, or maybe not before the end of August. But I think it will happen.

[investinator]

I get what you are saying, OP. The ascent of the price was suppressed for some time because of the SegWit2x debate, and now it's resolved, shouldn't the price be much higher?

The price is already much higher than it was a short time ago at $1,900. Also, two reasons why it's not even higher:

1. August 1st is the big date in the head of the public. It's the date you can read about in mainstream media.

2. The hard fork is upon us now.

3. SegWit is not running yet.

I expect the price to rise steeply over August/September. That could start at the beginning of August, or maybe not before the end of August. But I think it will happen.

As you said it has already risen a lot, and SegWit actually running might make it rise further but I think people have already priced it in. I think the only thing that will push prices higher in the coming days is less uncertainty going ahead and the realization of being back to very low fees.