• Messari CEO Ryan Selkis believes Bitcoin investors are entering a long-term accumulation phase.
• He suggests that Market Value to Realized Value (MVRV) is a metric that can be used to determine whether or not a cryptocurrency is currently overpriced.
• According to Selkis, if the MVRV is over 3, it is time to sell Bitcoin immediately, and if it is below 1, it is time to begin collecting Bitcoin.
Bitcoin investors may be entering a historic accumulation phase, according to Ryan Selkis, the founder and CEO of the cryptocurrency intelligence service Messari. In an interview with the financial journal Barron’s, Selkis suggested that on-chain signals are now indicating a buy signal for Bitcoin (BTC).
To determine whether a cryptocurrency is currently overpriced or undervalued, Selkis suggested using a metric known as the Market Value to Realized Value (MVRV). This metric is applied to the “fair value” of a cryptocurrency, which is calculated by subtracting its market cap from its realized cap. The score then determines whether or not the cryptocurrency is now overpriced or undervalued.
Selkis stated that if the MVRV is over 3, it is time to sell Bitcoin immediately, and if it is below 1, it is time to begin collecting Bitcoin. This applies to the whole history of Bitcoin. He believes that investors‘ current behaviour is comparable to how it was when it bottomed out in past negative cycles, and that this is evidence of an early stage of a long-term accumulation phase.
Selkis also stressed the importance of investors understanding the risks associated with Bitcoin, and he suggested that investors should not invest more than 5-10% of their portfolio in the digital currency. He believes that Bitcoin is currently in a good position to benefit from the upcoming economic crisis, as it has proven to be a safe-haven asset in the past.
Overall, it appears that Bitcoin investors may be in the early stages of a long-term accumulation phase. However, investors should still be aware of the risks associated with investing in Bitcoin, and should not invest more than 5-10% of their portfolio in the digital currency.