Bitcoin is viewed as undervalued, driven by recent U.S. job reports that raised hopes for interest rate cuts. Fidelity Digital Assets sees a potential rise in Bitcoin’s value while noting its market metrics indicate a less expensive cryptocurrency compared to its network strength. BlackRock’s Bitcoin ETF has experienced substantial inflows, reinforcing positive sentiment. However, concerns about an economic slowdown loom, suggesting mixed prospects ahead.
Bitcoin continues to linger in a bargain zone as fresh data from the U.S. jobs market raises hopes for interest rate cuts. According to Fidelity Digital Assets, Bitcoin is currently undervalued with a positive outlook for the mid-term. They indicated that the cryptocurrency’s valuation was trending towards what they call the “optimism” zone, hinting at the potential for significant gains ahead.
Fidelity’s assessment was supported by the ‘Bitcoin Yardstick’ metric, which measures the market capitalisation of Bitcoin (BTC) divided by its hashrate. A deterioration in this ratio suggests that BTC is relatively cheaper in relation to the energy stability of its network. Recent statistics show that in Q1 2025, this metric hovered between -1 and 3 standard deviations, a notable cooldown from overheated Q4 figures, emphasising that Bitcoin may be undervalued compared to its underlying network strength.
Interestingly, the report pointed out that Bitcoin has entered an “acceleration phase.” This means we might see more frequent rallies with the potential to achieve new price highs, though they also warned about the possibility of a short-lived peak. The percentage of illiquid Bitcoin supply increased from 61.50% to 63.49%. On the flip side, liquid supply decreased by 4%, suggesting that more holders are committing to long-term positions. The Illiquid Supply Shock Ratio is currently about 16% lower than what we saw at a peak in 2017.
Cointelegraph added that BlackRock’s iShares Bitcoin Trust (IBIT) has received a massive boost recently. On April 28, 2025, the trust reported an inflow of $970.9 million, marking its second-largest daily inflow since its debut in January 2024. In total, IBIT has attracted over $4.5 billion in net inflows just since April 22, defying the general trend in the market where rival ETFs like Fidelity’s FBTC and ARK’s ARKB have struggled.
Looking at the broader context, the March 2025 Job Openings and Labor Turnover Summary, known as JOLTS, reported a drop in job openings from 7.57 million in February to 7.19 million, which is below analysts’ expectations. A dip in these numbers typically signifies a slowdown in the labour market and may lead to Federal Reserve rate cuts that would depress the dollar, thus benefiting risk assets like Bitcoin.
In contrast, a numbers jump would imply economic strength, potentially delaying any cuts and pressuring crypto prices. Amid a backdrop of rising federal layoffs reaching numbers not seen since 2020, market sentiment has turned slightly dovish. Analyst Alex Kruger has been vocal about how the JOLTS report represents a short-term win for Bitcoin, framing it as a hybrid of risk and gold poised to gain from easing tariffs after President Trump’s recent decision.
Kruger also mentioned that upcoming earnings guidance from firms like Caterpillar and technology giants could sway market momentum. Attention will shift to next week’s Federal Open Market Committee meeting, where Chair Powell may hint at earlier rate cuts – which could make Bitcoin more appealing to investors.
He did caution, though, about a possibly rocky Q3 with some economic slowdown on the horizon. However, Kruger firmly believes Bitcoin’s risk-reward ratio will outperform many altcoins, which he sees as currently overvalued.
Note: This article does not constitute financial advice, and all investment carries risk. Readers are advised to carry out their own due diligence before making investment decisions.
