The analysis of Bitcoin against gold's negative squared suggests an undervaluation opportunity

The latest analytical report published by Plan C on X utilizes a negative squared model to statistically verify the relative valuation of Bitcoin and gold, providing important insights into the current market environment. What emerges from this analysis are market distortions that cannot be explained by traditional investment theories and the potential profit opportunities they generate.

Robustness of Mean Reversion Indicated by the Statistical Model

This negative squared analysis is based on a robust statistical model that maintains a high R-squared value over time. Validation results of the model reveal that the price ratio of Bitcoin to gold exhibits significant mean reversion characteristics. In other words, relative prices that deviate substantially tend to converge toward their historical average over the long term.

This kind of statistical stability is not merely coincidental but also a testament to the market mechanisms functioning properly. The sustained high level of R-squared indicates that this model has considerable predictive reliability.

Investment Opportunities Offered by Historical Undervaluation

An interesting point is that Bitcoin is currently at its lowest historical valuation relative to gold. This degree of underestimation is analyzed as one of the most extreme states in Bitcoin’s trading history.

Compared to the traditional store of value, gold, the fact that Bitcoin is valued so low sends an important signal to market participants. Based on the mean reversion characteristic indicated by the negative squared model, this extreme deviation is likely to be corrected.

As history has repeatedly proven, extreme values often serve as sources of investment opportunities. For investors, the current undervaluation of Bitcoin holds the potential to offer long-term profit opportunities through the natural mechanism of mean reversion suggested by the statistical model.