Fidelity Digital Assets has updated its previous assessment of Bitcoin’s medium-term prospects, changing it from “positive” to “neutral” due to various factors that suggest Bitcoin may no longer be undervalued and could face increased selling pressure.
According to Fidelity’s recent Signals report released on April 22, the firm referred to the use of the Bitcoin Yardstick or Hashrate Yardstick, which functions similarly to the Price-to-earnings ratio in stock markets, to determine the value of Bitcoin.
The Yardstick showed that in the first quarter, the deviation from the average of 51% remained between negative one and zero, meaning that there were no days in Q1 where Bitcoin was considered cheap. Based on this, Fidelity believes that Bitcoin is now being traded at a fair value, leading them to revise their medium-term outlook for the cryptocurrency to neutral.
Additionally, Fidelity also mentioned that the selling pressure may increase as long-term holders are selling and 99% of addresses hold Bitcoin at a profit, which could incentivize selling.
