Bitcoin Valuation Metrics Suggest BTC May Be Undervalued
Bitcoin’s recent drop to a new cycle low below $60,000 has sparked a key question among investors: is bitcoin finally cheap again? The answer may influence sentiment through the rest of the cycle.
According to a June 9 research report from Grayscale Investments Head of Research Zach Pandl, a composite onchain valuation indicator suggests bitcoin is now trading below its long-term average valuation. Whether BTC has bottomed may depend on regulatory progress and leveraged holders, but the data points to undervaluation versus historical trends.
“The answer—according to the signal from a range of onchain valuation indicators—is yes, but not as much as previous cyclical lows,” Pandl wrote in response to the question, “Is Bitcoin Cheap Yet?” The latest readings show BTC below its long-term valuation average, but not near the deeper discounts seen after the FTX collapse.
The Grayscale head of research stated:
“We believe that this bear market may be shallower than in the past, given a more muted preceding bull market, as well as improvements in market structure from ETP availability, wealth platform deployment, and other types of institutional adoption.”
Pandl argues that bitcoin’s market structure has changed significantly over the past few years. Exchange-traded products, wealth platform access, and institutional adoption may help explain why bitcoin may not need to revisit earlier bear-market extremes before attracting buyers.
The valuation model combines three onchain indicators. Net Unrealized Profit and Loss (NUPL) measures whether holders are sitting on gains or losses. Price/Cumulative Value Days Destroyed (CVDD) compares bitcoin’s price with a long-term value benchmark based on the movement of long-held coins. Market Cap/Thermo Cap compares bitcoin’s market value with cumulative miner revenue.
CLARITY Act and Leveraged Traders Could Shape BTC’s Next Move
Despite the encouraging valuation signals, Grayscale says two major factors could determine bitcoin’s next move.
The first is the fate of the CLARITY Act in the U.S. Senate. Grayscale frames the legislation as a near-term catalyst that could influence how investors assess regulatory risk in digital assets.
The CLARITY Act would establish a federal market structure for digital assets, including rules for token classifications, exchanges, brokers, custody, and disclosures. The U.S. House passed the measure in 2025, and the Senate Banking Committee advanced it in a bipartisan vote in May. The bill still requires approval from the full Senate.
The second factor is whether leveraged bitcoin holders can withstand current market pressure without triggering additional selling. If heavily leveraged investors are forced to unwind positions, bitcoin could face renewed downside volatility.
Grayscale’s head of research stated:
“We remain optimistic about CLARITY but prediction markets say it’s a tossup.”
Investors are closely watching both developments. Regulatory progress could support confidence, while stabilized leverage could ease concerns about forced selling.
For now, Grayscale believes bitcoin’s current valuation may offer an attractive opportunity for long-term investors. The firm is not calling a definitive market bottom, but its research suggests BTC trades at a discount relative to historical norms. Whether that discount becomes a durable bottom may depend on Senate progress, leverage conditions, and market stress.
