Transcription
Hey everyone, and thanks for jumping back into the cryptoverse. Today, we're going to talk about Bitcoin, the beauty of mathematics, part 65.
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So, normally I do these videos on the first of the month, but I was traveling a lot. I was in Dubai, as I'm sure many of you guys know. Um, so I didn't really have a great chance to do this video. Uh, but here we are. And at least as of December 12th, total cryptocurrency market cap is currently at around 3.07 trillion, with that trend line, the fair value logarithmic regression trend line, coming in around 4.8 trillion. So, we are technically below that fair value, quote unquote, fair value logarithmic regression line.
Now, one of the interesting things about this cycle in particular is that we haven't really ever gone durably overvalued. But I would still contend that we're kind of following this whole 2019 move where we would go overvalued, but we couldn't seem to hold it, and it was mostly just due to, you know, issues that were not really anything the cryptocurrency markets could control, right? I mean, just liquidity issues where we're starting to see stresses in money market accounts. Fed is finally ending QT. Um, remember in 2019, we saw something very similar where we were overvalued and then we kind of came back down as QT ended and QE began.
So, it just goes to show you, right, that like, I mean, while this cycle has felt different for Bitcoin, it really has been the same, just a normal market cycle, just with diminishing returns. It's mostly been different for the altcoin market, right? Because normally, the reason why the asset class as a whole goes overvalued, that's when you have what people call alt season. But this cycle, we haven't had that, right? That hasn't actually happened. And so, it really goes to show, like, why sometimes just sticking with the blue chips actually ends up working out a lot better than, than, you know, trying to be diversified in a lot of different altcoins. Um, with investing, remember, nothing is promised, right? Nothing is ever promised with investing. And so, you want to make sure you stick with the blue chips of of each asset class.
So, again, um, right now, if you look at the percent difference between total market cap and the fair value logarithm, the congressional trend line, it looks something like this. And so, I mean, it doesn't look that dissimilar from what we saw back in 2019, where we would go overvalued, but then we kept failing to hold it. Um, but we are getting back down near where we were back in October of 2023, in terms of sort of that undervaluation level. Now, we're not as undervalued as October of 2023, but you can see that the current, the asset class is currently more undervalued than April of 2025 and September of 2024.
Now, it might seem weird to say it's more undervalued than April of 2025, because, well, Bitcoin is above where it was in April of 2025. In fact, total market cap is also above it. But the reason why is because the assumption is that, you know, the fair value is going up. So, while total market cap might be more, today you could argue it's more undervalued just because the fair value back in, you know, in April, um, was like 3.7 trillion, whereas the quote unquote fair value today is about a trillion higher, you know, 4.7, 4.8.
So, we'll see what happens in, you know, the bare market. I mean, as I said before, I I I'm running under the assumption here that we're in a bare market. Um, we're probably about two months in to the bare market, if I had to guess. Um, so, you know, I mean, I I think next year will be an interesting year because we're kind of coming off of a non-euphoric peak in, uh, in 2025. And that doesn't mean that certain things can't go to new all-time highs. There are absolutely, there will be some cryptocurrencies that probably go to new all-time highs, but I don't think Bitcoin is going to be one of them. Um, that's kind of my take right now, right? Like, it it seems like Bitcoin is sort of broken all the market structures that you would expect it to break in a bare market. And and so, you know, ultimately, as I've said, I mean, I I do think the entire asset class will go to 10 trillion, plus or minus a few trillion. Um, could be 7 trillion, could be 12 trillion, right? Who knows? So, I do think it will eventually go to 10 trillion, 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?