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  • Bloomberg cryptocurrency analyst Mike McGlone believes Bitcoin is greatly undervalued and its fair value price should be about $15,000 as its Hashrate hits new records constantly.

    The price of bitcoin (BTC) has been between $10,000 and $12,400 over the last weeks, often tumbling sharply following and could be described as “fake” breakouts.

    The latest rout saw Bitcoin crash more than 8% within days from over $11,000 to $10,100. Rught now, each bitcoin is trading for $10,695, up nearly 2% in 24 hours.

    McGlone, a senior commodity strategist at Bloomberg, said Bitcoin is undervalued and its fair value is much higher than what it is right now. He connected that to various factors, such as bitcoin’s rising hashrate, which hits new records constantly, as industry media report.

    He said: “The Bitcoin hashrate continues to increase and recently reached new highs. Also advancing are addresses used. A top metric for adoption, the 30-day average of Bitcoin addresses is equivalent to the price closer to $15,000 when measured on an autoscale basis since 2017.”

    According to the latest data from charts.Bitcoin.comBTC’s seven-day average hashrate rose past 140 exahash per second (EH/s) this week, which is an all-time high. On July 28, the figure averaged 127 EH/s, a record at the time.

    Hashrate is a measure of the power of the computers linked to the Bitcoin blockchain, which indicates their ability to produce new coins. Increasing hash power shows miners’ optimism about making profits.

    This tends to influence the price of BTC higher, given the strong correlation between the two. But the relationship is not exactly as linear, because it is not possible to guess future price changes based on hashrate alone.

    Meanwhile, the number of active bitcoin addresses has climbed to 991,000, Glassnode data shows, up from 684,000 at the beginning of this year, when the asset’s price averaged around $7,700. When active addresses hit approximately 1.1 million on December 23, 2018, bitcoin traded for $14,800, on the average.

    McGlone has remained upbeat about bitcoin throughout its volatile swings, at a point claiming this is going to be the year that the top cryptocurrency will become a digital version of gold, a prime store of value.

    In his new analysis, he says there might be pitfalls curtailing Bitcoin’s price growth going forward, and that would have to be a reversal of the on-chain metrics related to “the hashrate and active addresses.”

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