Definition ∞ A Bitcoin valuation metric is a tool or calculation used to assess the underlying value of Bitcoin. These metrics help determine if Bitcoin is overvalued, undervalued, or fairly priced at a given moment. They provide analytical perspectives beyond simple price observation. Examples include the Stock-to-Flow model or the Market-Value-to-Realized-Value ratio.
Context ∞ Bitcoin valuation metrics frequently appear in crypto news as analysts attempt to explain price movements and predict future trends. These tools offer a framework for understanding Bitcoin’s market position amidst economic shifts and technological developments. Discussions around these metrics assist investors in making informed decisions about Bitcoin holdings and understanding its long-term potential. The efficacy of various metrics is a constant subject of debate among market participants.
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