Bitcoin, Nasdaq value gap at all-time high...entering undervalued territory

▲ Bitcoin (BTC) decline/AI generated image

Amid a surge of capital into US big tech stocks, the valuation gap between Bitcoin (BTC) and the Nasdaq 100 has widened to an all-time high, leading to analysis that the market's next focus could shift to Bitcoin's undervalued territory.

According to cryptocurrency media outlet Cointelegraph on May 27 (local time), asset management firm Bitwise analyzed that Bitcoin remains in a range below its long-term valuation average, while US tech stocks are trading at record premium levels. Bitwise explained that Bitcoin's Market Value to Realized Value (MVRV) is currently 1.42, which is lower than its historical average.

According to the Bitwise Weekly Crypto Market Compass report, only 36% of past MVRV readings for Bitcoin were lower than the current level. In contrast, approximately 99% of the Nasdaq-100's price-to-book ratio in the past was lower than its current level. Bitwise assessed the difference between the two assets as an all-time high valuation gap between Bitcoin and US tech stocks.

Bitwise believes that the flow of capital into large US tech stocks, especially AI-related companies, is intertwined with this gap. Bitwise stated that investors are accepting AI-related companies as alternative hard assets alongside gold, adding, "The rally in US stocks and gold could be a prelude to an overall increase in demand for hard assets, which could provide a tailwind for Bitcoin in the future."

XWIN Japan also diagnosed that the concentration of funds in the US stock market could affect Bitcoin. XWIN Japan explained that hedge fund leverage rose to around 293%, and S&P 500 dollar-denominated short positions reached an all-time high. Last week, NVIDIA's short exposure for a single stock was approximately $62.5 billion, surpassing Apple's $38.5 billion and Microsoft's $33.7 billion.

XWIN Japan pointed out that Bitcoin was sold alongside stocks during the March 2020 COVID-19 crash and generally moved in the same direction as the S&P 500 from 2020 to 2022. However, the relationship between the two assets weakened after 2025, and Bitcoin showed greater volatility while the S&P 500 moved within a relatively stable range. XWIN Japan stated that strong spot buying and Bitcoin spot ETF inflows are having a greater impact on Bitcoin's price formation, adding, "Bitcoin demonstrates its evolution from a pure risk asset to a hybrid asset class that is sensitive to macro liquidity yet can follow its own market structure."

CryptoQuant analyst MorenoDV explained that the Bitcoin Risk Index recently surpassed 2 again, and similar signals appeared near major past lows. This index tracks capital flows relative to Bitcoin's total market value. Similar spikes were observed after the Mt. Gox collapse in 2015, at the bottom of the 2018 bear market, during the March 2020 COVID-19 crash, and during the Terra Luna and FTX collapses in 2022. MorenoDV assessed the current indicator as the strongest signal since early 2023, but still a low-risk zone that does not reach the levels of capitulation selling seen in 2020 or 2022.

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