Transcription
Hey everyone, thanks for jumping back into the cryptoverse. Today we're going to talk about Bitcoin, the beauty of mathematics, part 62.
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So, as of September 1st, 2025, the total cryptocurrency market capitalization is coming in at a modest 3.765 trillion with the fair value logarithmic aggression trend line fit to all prior data suggesting the fair value is around 4.285 trillion. This continues to represent an undervaluation which we've seen for most of this cycle of approximately 12%.
One of the reasons we have seen a continued undervaluation for most of this cycle is because the altcoin market has not really joined the party. Um, when you think about what has made new all-time highs this cycle, we have Bitcoin having made durable all-time highs that weren't just wicks above the prior all-time high. But then the number two cryptocurrency by market cap is Ethereum and it only just made a new all-time high. And as we suggested, it would likely put in an an all-time high in August and then likely drop back down to its 21week EMA in uh probably by like late September or so. So I still am not really expecting this to go overvalued in any durable fashion in September. And one of the reasons for that is in order to see a a larger overvaluation period, you need altcoins to join the party. And I don't see that happening until after Ethereum makes more durable all-time highs. So, for now, it it's probably going to continue to hug that trend line. Um, you know, moving around it just like it's been doing for the last few years. Perhaps later this year, we might see an overvaluation period, but we're not we're not there yet.
And and it's important to remember that um as long as you kind of hug this trend line, it's more of a suggestion that Bitcoin is still leading, right? It's still leading and and you're not it's still a reason to sort of, you know, to fade all those alt season callers. Uh because when we're down here, Bitcoin normally leads and and you're you're most likely better off with Bitcoin. And this is still in line with our recent assessment that Bitcoin dominance will likely go up in September and October. Um, so just remember that Bitcoin leads and and we should start to see Bitcoin dominance go up and that's also supported by this showing you that we're still below the fair value logarithmic regression trend line which as always is a monotonically increasing function.
If we take the percent difference from the total market cap and the fair value logarithmic regression trend line, you get a chart that looks like this. And you can see how it tends to spend a decent amount of its time below the red line, which means undervalued below that. And so far, every time it's popped its head above the fair value, it's been a fake out. We've seen that we we've seen the very similar stuff in in prior cycles. But if we go back up again later on this year, that might finally lead into uh perhaps a more durable overvaluation. But I don't think that's going to happen until after Ethereum makes more durable all-time highs. And I don't think that's going to happen uh until October at the earliest. So just something uh to keep in mind as this market cycle goes on.
I don't want to continue to sort of ramble in this video because we've covered the the main arguments that I want to talk about when we do these beauty of mathematics series updates. It's all about let's get a 30,000 ft view of where the asset class is. Let's try to understand, you know, the rotations that are going on and and then let's wrap it up. Ultimately, I I do expect the asset class to reach 10 trillion. Um probably not going to happen this year. Maybe maybe by next market cycle, right? Hopefully we could hope. But ultimately, I I think it's going to to 10 trillion dollars plus or minus a few trillion. And as we go to sleep at night, we cannot help but wonder what's a few trillion dollars among friends.