Bitfinex Alpha #58 | Is Bitcoin Undervalued?

A metric that conducts an #OrdinaryLeastSquares (#OLS) regression analysis of the relationship between #Bitcoin and the S&P 500 over the past 200 days shows that #BTC is now undervalued. Ordinary Least Squares (OLS) is a statistical technique used to estimate the relationships among variables. In the context of financial assets, OLS regression analysis can be used to understand the relationship between the returns of two assets. This metric aims to estimate a fair value for Bitcoin's price based on the current S&P 500 price. This analysis, which applies an OLS regression to the prices of Bitcoin and the S&P 500 over the past 200 days, yields a fair value for Bitcoin of $27,550. However, Bitcoin's current price, hovering in the mid-$25,000s (at the time of writing), is nearly $2,500 lower than this fair value estimate. This price difference represents an undervaluation of more than eight percent of Bitcoin compared to the estimated fair value. This undervaluation is the most significant since February. Find out more in [Bitfinex Alpha Issue #58](https://blog.bitfinex.com/wp-content/uploads/2023/06/Bitfinex-Alpha-58.pdf) and subscribe to our weekly newsletter [here](https://blog.bitfinex.com/bitfinexalpha/). #BitfinexAlpha #BitfinexAlpha58