{"id":43576,"date":"2021-06-01T17:49:06","date_gmt":"2021-06-01T14:49:06","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=43576"},"modified":"2025-08-31T13:02:46","modified_gmt":"2025-08-31T10:02:46","slug":"willy-woo-explains-why-he-considers-bitcoin-undervalued","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/willy-woo-explains-why-he-considers-bitcoin-undervalued\/","title":{"rendered":"Willy Woo explains why he considers Bitcoin undervalued."},"content":{"rendered":"<p>Analyst Willy Woo published a thread explaining why the fundamental value of the first cryptocurrency exceeds its market price.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">A thread about NVT, one of the first on-chain signals first published in Feb 2017.<\/p>\n<p>This is a 2021 re-hash of my NVT learnings since then.<\/p>\n<p>\u00abHow to use on-chain volume to establish a fundamental valuation for Bitcoin.\u00bb <a href=\"https:\/\/t.co\/m3BHsFx70o\">pic.twitter.com\/m3BHsFx70o<\/a><\/p>\n<p>\u2014 Willy Woo (@woonomic) <a href=\"https:\/\/twitter.com\/woonomic\/status\/1399644889596370950?ref_src=twsrc%5Etfw\">June 1, 2021<\/a><\/p><\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>According to Woo, one of Bitcoin&#8217;s fundamental indicators is the NVT indicator [Network Value to Transactions]. It is inversely proportional to the velocity of coins moving in the blockchain of digital gold.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">I just introduced NVT Ratio.<\/p>\n<p>NVT Ratio is inverse monetary velocity, the co-efficient of proportionality that we can multiply volume by to get market cap. <a href=\"https:\/\/t.co\/fnTSuGbzbu\">pic.twitter.com\/fnTSuGbzbu<\/a><\/p>\n<p>\u2014 Willy Woo (@woonomic) <a href=\"https:\/\/twitter.com\/woonomic\/status\/1399644916007927811?ref_src=twsrc%5Etfw\">June 1, 2021<\/a><\/p><\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Woo noted that NVT oscillates around an imaginary mid-line. He said it is the normal multiplier by which on-chain transaction volume should be multiplied to obtain a valuation.<\/p>\n<p>If the indicator sits below this line, as it does at present, the market undervalues the asset, and vice versa.<\/p>\n<blockquote class=\"twitter-tweet\" data-conversation=\"none\">\n<p lang=\"en\" dir=\"ltr\">NVT oscillates around an imaginary mid-line. That mid-line is in effect the normal ratio that we should multiply volume by to get its valuation. <a href=\"https:\/\/t.co\/wEQrmTpzc0\">pic.twitter.com\/wEQrmTpzc0<\/a><\/p>\n<p>\u2014 Willy Woo (@woonomic) <a href=\"https:\/\/twitter.com\/woonomic\/status\/1399644923498954752?ref_src=twsrc%5Etfw\">June 1, 2021<\/a><\/p><\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>The specialist noted that the NVT chart is &#8216;drifting upward&#8217;. He attributed this to the growing dominance of crypto exchanges, as substantial volumes of assets move off the blockchain.<\/p>\n<p>To compute the fundamental valuation of the network [NVT Price], multiply the median NVT value, adjusted for the drift due to the absence of exchange activity, by the on-chain transaction volume.<\/p>\n<blockquote class=\"twitter-tweet\" data-conversation=\"none\">\n<p lang=\"en\" dir=\"ltr\">Putting it all together. We run a 2 year moving median of NVT Ratio, that gets us an estimate of the mid-line value also accounting for the drift upwards due to the missing exchange activity. Multiply this by the on-chain volume, and we get a fundamental network valuation. <a href=\"https:\/\/t.co\/M2WQtiisLC\">pic.twitter.com\/M2WQtiisLC<\/a><\/p>\n<p>\u2014 Willy Woo (@woonomic) <a href=\"https:\/\/twitter.com\/woonomic\/status\/1399644947565879304?ref_src=twsrc%5Etfw\">June 1, 2021<\/a><\/p><\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>According to Woobull Charts, NVT Price for Bitcoin is estimated at $54 538. At the time of writing, the first cryptocurrency trades around $37 000.<\/p>\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh6.googleusercontent.com\/vGi15PUu9IlOKCQzdawUhN-XsF0fbGbnDK8TRpbWwHd2M8e0wtOLSTTOVLi-u-B6UrZUJuixb3a7xT_AG8bw_7Bwgs8SC9KvNWOOxxE3akbLMIPkVMv0KIhsdNYeKPamUozWphfv\" alt=\"\u0412\u0438\u043b\u043b\u0438 \u0412\u0443 \u043e\u0431\u044a\u044f\u0441\u043d\u0438\u043b, \u043f\u043e\u0447\u0435\u043c\u0443 \u0441\u0447\u0438\u0442\u0430\u0435\u0442 \u0431\u0438\u0442\u043a\u043e\u0438\u043d \u043d\u0435\u0434\u043e\u043e\u0446\u0435\u043d\u0435\u043d\u043d\u044b\u043c\"\/><figcaption>Graph of BTC\/USDT on Binance. Data: TradingView.<\/figcaption><\/figure>\n<p>The analyst&#8217;s view contradicts the stance of Peter Brandt, head of trading firm Factor LLC. The latter <a href=\"https:\/\/forklog.com\/en\/news\/peter-brandt-questions-the-near-term-bitcoin-rally\">cast doubt on the Bitcoin price rise<\/a> in the short term.<\/p>\n<p>Back in March, Woo said that in 2021 digital gold was poised for the final phase of a three-year rally <a href=\"https:\/\/forklog.com\/en\/news\/willy-woo-selling-bitcoin-now-is-madness\">\u00abexplosive bull rally\u00bb<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Analyst Willy Woo published a thread explaining why the fundamental value of the first cryptocurrency exceeds its market price.<\/p>\n","protected":false},"author":1,"featured_media":43577,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[18,1146,1514],"class_list":["post-43576","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-bitcoin","tag-cryptocurrency-market-forecasts","tag-willy-woo"],"aioseo_notices":[],"amp_enabled":true,"views":"21","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/43576","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=43576"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/43576\/revisions"}],"predecessor-version":[{"id":43578,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/43576\/revisions\/43578"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/43577"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=43576"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=43576"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=43576"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}