Bitcoin Energy Value metric says 'fair' BTC price is up to $167K

Key points:

• Bitcoin is heavy undervalued versus its “fair” terms based connected miner output.

• The Energy Value metric calculates that BTC should beryllium trading astatine astir $170,000 already.

• Bitcoin is further from its vigor worth present than erstwhile it passed $10,000 for the last clip successful September 2020.

Bitcoin (BTC) should commercialized astatine up to $167,800 per coin if terms matched its “energy value,” says the laminitis of crypto plus manager Capriole Investments.

In an X post Thursday, Charles Edwards calculated that Bitcoin’s existent worth is astir 45% higher than its existent $116,000.

Bitcoin “fair value” demands 45% terms surge

Bitcoin miners clasp the cardinal to a hyper-bullish BTC terms prognosis that calls for BTC/USD to emergence astir 50%.

Bitcoin’s “Energy Value” metric, created by Capriole successful 2019, argues that Bitcoin’s close price, oregon “fair value,” is “a relation of vigor input, proviso maturation complaint and a changeless representing the fiat dollar worth of energy.”

While this means that BTC/USD should beryllium zero if miners were to halt participating successful the web entirely, existent grounds hashrates amusement that Bitcoin is thing but worthless.

Data from onchain analytics level Glassnode puts the existent hashrate — the combined processing powerfulness dedicated to the web by miners — astatine 1.031 zettahashes per 2nd (ZH/s), with its latest all-time highs coming connected Aug. 4.

Bitcoin mean hash rate. Source: Glassnode

“Hash Rates are flying and Bitcoin Energy Value conscionable deed $145K,” Edwards commented, referring to the metric’s elemental moving mean (SMA). 

“That puts terms astatine a 31% discount to value.”

Bitcoin Energy Value data. Source: Capriole Investments

Bitcoin’s Energy Value has reached up to $167,800. Network fundamentals present opposition considerably with price, which has dipped by astir 10% since its grounds highest past month.

“We are trading astatine a deeper discount to worth contiguous astatine $116K, than erstwhile Bitcoin was astatine $10K successful September 2020,” Edwards added.

BTC terms vs. mean reversion

As Cointelegraph reported, galore marketplace participants judge the existent Bitcoin bull tally has conscionable months to run.

Related: Bitcoin proviso daze to 'uncork' BTC terms arsenic OTC desks tally dry

This gives BTC terms precious small clip to lucifer its Energy Value rating, which would autumn if miners were to trim the magnitude of vigor they employ.

“Consistent vigor input represents a equilibrium betwixt proviso and demand. Rising marketplace prices incentivize accrued vigor input via hash powerfulness maturation and exertion improvements which effect successful greater vigor efficiencies,” Capriole explains successful an instauration to the metric. 

“For this reason, large increases successful marketplace terms typically effect successful semipermanent increases successful committed vigor and truthful increases successful Bitcoin’s Energy Value. However, erstwhile speculation causes skyrocketing prices, without a corresponding summation successful vigor input, terms has historically collapsed backmost to the Energy Value.”

Bitcoin Hash Ribbons data. Source: Capriole Investments

Bitcoin’s Hash Ribbons metric meantime continues to reenforce a steadfast outlook for some miners and terms show aft its latest "buy signal" flashed successful precocious July.

This nonfiction does not incorporate concern proposal oregon recommendations. Every concern and trading determination involves risk, and readers should behaviour their ain probe erstwhile making a decision.