Bitcoin is Undervalued, But the Bottom Isn't In Yet | Rational Root

**The Rational Root** (0:03)
I think setting in a new autumn high this year would definitely be a reason to assume that we're moving away from the four-year pattern. It's a big opportunity because, you know, we basically have another few months of checking extremely cheap sides, and Bitcoin will turn around again. I mean, Bitcoin is not going to zero. It's literally the only hope we have on a better future for humanity and to even live in peace with AI. And Bitcoin is already heavily undervalued. In my opinion, Bitcoin is worth much more than 200k, and probably will go into the millions. If you're a holler, have patience for a couple of months, and that will be rewarded.

**Danny Knowles** (0:45)
The Rational Root, The Big Carrot, you are back. Welcome back on the show, man.

**The Rational Root** (0:51)
Thank you so much for having me, Danny.

**Danny Knowles** (0:54)
We've got a lot to talk about today. The world is going pretty fucking crazy at the moment. And the most interesting thing to me over the last week or two is that while the US is at war with Iran, the S&P is down, even gold is down, silver is down a bit, and Bitcoin is up. What's different?

**The Rational Root** (1:14)
Yeah, so I think, I mean, Bitcoin obviously had a big crash beforehand. And so I think the news of the war was not really a reason anymore to go lower, which actually is a very positive thing, right? Because Bitcoin is all about fear and greed. And so, you know, all these conflicts in the world, they create fear in the market, and that affects price action or it affects people's behavior, right? And so the fact that we actually had a war coming out, like with Iran, and it didn't do much to Bitcoin, shows that, you know, we're fairly, you know, we're a long route in that bottom formation, let's say. And we, I mean, there might still be a reason to go slightly lower, and I'll explain with some charts why I think that might be the case. We don't have to get there. But, you know, this is a positive thing.
We had this, like on the 5th of February, we had, of course, a heavy lag down, and Bitcoin is already at very undervalued levels. If you look at, you know, many on-chain metrics, you know, Bitcoin is heavy undervalued. But it doesn't mean that we cannot go lower. I mean, usually in bear markets, time is also important, you know, like it just takes sometimes a couple of months to form that bottom. And so I don't know if we'll get another lag down, but I do think we still have a couple of months to go before, like we really go back up again and go into the hundreds and so forth.

**Danny Knowles** (2:46)
Yeah, I mean, I know that we obviously had gone down a lot before this, but normally when there's a big geopolitical event, especially they always seem to happen when markets are closed, which again happened this time with the Iran War, Bitcoin normally falls off a cliff. And this time it was, I think, was up on the day of the actual, the start of the Iran War, and it's even higher today. Do you think that this is just because we had a big lag down, there was no more sellers at that point, or do you think there's people waking up to Bitcoin as an idea? I mean, we know a lot of people were trying to get out of the Middle East as quickly as possible and probably take as much with them as possible, and we know Bitcoin is the best thing for that. How much of this do you think is a narrative shift, rather than just like we were already down a lot and Bitcoin didn't really want to go down further?

**The Rational Root** (3:30)
Well, I think mainly because we had a big crash beforehand, that was a reason why Bitcoin didn't drop any lower, even though we had another catalyst, because we already had several catalysts.
We had a war each month, and so another war, it didn't affect Bitcoin as much. But there is some truth to people in Iran using Bitcoin and stable coins for that matter, probably maybe as much stable coins, because the value is slightly more stable. And if you're in a war, you don't want to really deal with volatility as much. But I think that does play a role.
I mean, I literally met people from Ukraine who escaped Ukraine on Bitcoin and were able to start a life in Europe with their Bitcoin, taking their value across borders. And so I think some of that might happen in Iran as well. I'm sure people in Iran are aware of the value proposition of Bitcoin. But then dealing with volatility in times of war and uncertainty is a reason to use stable coins as well. And now I'm not sure what the reasons are for the war. I mean, there's... I'm not a macro expert, but I'm happy to give some of my takes. You know, this conflict, you know, again, one of many this year. You know, we saw Venezuela before. Now we see Iran. I think Trump is doing everything he can to keep the economy up before the midterms. So I'm not sure if, like, I'm sure he wants this war to be over before the midterms, but I don't know if that's going to happen. I think maybe things are not going his way. And then I don't know how much Israel, I mean, Israel is obviously heavily involved, and I don't know how much that has to do with Trump. You know, I'm also not really going to speculate about that. But we do, like stablecoin uses is a very interesting factor for Trump, you know, because stablecoin uses is a demand for government bonds. And so that is, you know, needed. And so maybe a key factor also that contributes to the start of this war. And so we will see how this turns out. I don't know, like, historically, the midterms are obviously generally like a bad year for markets in general. So we see usually a stock market crash, like around the midterms plus Bitcoin. And Bitcoin is usually early. I have a chart on that.