Bitcoin's Fair Value Is $197,000, Bitwise Exec Says: Can BTC Close the Gap?

Bitcoin (CRYPTO: BTC) could be significantly undervalued relative to global liquidity, with an equilibrium price of $197,000 being the fair value, Bitwise’s Director and Head of Research André Dragosch argued on Tuesday. Is a Fed Pivot The Next Major Catalyst for BTC? Speaking to Bitcoin Magazine on Sept. 29, Dragosch said fiscal policy has already become more supportive, but monetary policy remains the missing piece for a sustainable Bitcoin bull market. He argued that the Fed and other major central banks remain on a collision course with markets as elevated interest rates tighten financial conditions. One potential trigger for a policy shift could be stress in bonds and equities. Bitwise’s research found that around 80-basis-point increase in the 10-year Treasury yield over 20 trading days materially increases the probability of a sharp S&P 500 correction. Dragosch said the latest 20-day increase was around 50 basis points with higher yields already filtering into mortgage rates and the housing market. A larger equity correction could increase recession and financial-stability risks, potentially pushing the Fed toward a pause or eventual pivot. Why Bitcoin’s Model Points to $197,000 Bitwise’s global money-supply model puts Bitcoin’s equilibrium value near $197,000, more than twice its current price, Dragosch pointed out. While S&P 500 and gold trade above their implied liquidity values, Bitcoin remains below its modelled fair value. A mean reversion with a rotation from expensive AI stocks into cryptocurrencies, coupled with a weaker dollar could help close the gap. Bitwise research also shows Bitcoin has historically performed best during periods of pronounced dollar weakness and expanding global liquidity. Dragosch flagged that Bitcoin’s S&P 500 correlation has fallen to its lowest since 2015, while its gold correlation hit a six-year high, suggesting investors increasingly view both as complementary hard assets. He sees a potential 10% to 20% S&P 500 correction but expects Bitcoin’s downside to be more limited after its earlier drawdown priced in macro weakness. Bitwise research suggests roughly 5% Bitcoin exposure could optimize risk-adjusted returns in a diversified portfolio, rising to 13%-14% for a traditional 60/40 portfolio. Image: Shutterstock Read Also: Bitcoin's Rally Breaks Analyst's Bear Thesis: What Happens Next?