Bitcoin's Energy Value Suggests Significant Undervaluation
According to Cointelegraph, Bitcoin (BTC) is currently trading significantly below its "fair" price, as calculated by the Energy Value metric. This metric, developed by Capriole Investments in 2019, suggests that Bitcoin should be valued at approximately $167,800 per coin, a stark contrast to its current market price of $116,000. The Energy Value metric considers factors such as energy input, supply growth rate, and a constant representing the fiat dollar value of energy. This calculation indicates that Bitcoin's true value is around 45% higher than its present trading price.
Bitcoin miners play a crucial role in this valuation, as their activity directly influences the Energy Value metric. The current hashrate, which measures the combined processing power dedicated to the Bitcoin network, has reached an all-time high of 1.031 zettahashes per second (ZH/s) as of August 4. This high hashrate underscores the network's robustness and contradicts any notion of Bitcoin being worthless. Charles Edwards, the founder of Capriole Investments, noted that Bitcoin's Energy Value recently hit $145,000, placing the current price at a 31% discount to its calculated value.