Why Bitcoin Price Remains Significantly Undervalued: OTC Market

By September 12, 2016Bitcoin Business

The price of Bitcoin recovered relatively quickly after the security breach at Bitfinex settled, bouncing back to around US$630. The rapidly surging price of Bitcoin led to various presumptions from experts suggesting that it may be the next big spike of Bitcoin price which was predicted earlier this year. However, the price of Bitcoin remains at US$607, which is a severely undervalued price of the digital currency. When measuring the value of an asset or a currency, researchers and analysts normally look into the total buy and sell orders and compare the differences in demand and supply. For instance, the demand for Bitcoin has been significantly higher than its supply, because their has been more buy orders placed on trading platforms than sell orders. While this method of price valuation is used widely throughout many markets, it may not be specifically applicable on the price of Bitcoin because it eliminates a significant chunk of the digital currency that researchers, analysts and investors continue to overlook: the over-the-counter market. Currently, the exchange market of Bitcoin processes around US$71 million trades on a daily basis. That is, exchanges like Bitstamp, Bitfinex and Kraken enabling traders to buy and sell bitcoin on regulated exchanges. However, most if not all price data charts exclude over-the-counter markets because there is no actual method of gathering information from all peer to peer trades. Popular over-the-counter exchange platforms like LocalBitcoins are exceptions as the LocalBitcoins team gather all its data and releases it as weekly trading volumes to show and compare trading volumes in regions like Russia and other countries with comparably poor Bitcoin infrastructures. Other major over-the-counter exchanges or brokers don’t release their data and that makes it virtually impossible for analysts and traders to breakdown. According to Civic.com ceo Vinny Lingham , the OTC […]

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