#BTCUnbound The 'fair' price of Bitcoin reaches $167,000😱 BTC 🔥
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The Bitcoin energy value metric states that the 'fair' price of Bitcoin reaches $167,000.
The 'energy-based fair value' of Bitcoin is $167,000, which is 45% higher than its current price, while standard hash rate data shows that Bitcoin is trading at a deep discount of 31%.
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Key points:
The value of Bitcoin is significantly low compared to its 'fair' price based on miners' production.
The energy value calculates that the trading price of BTC should be around $170,000.
Bitcoin is now farther from its true value compared to when it last surpassed $10,000 in September 2020.
Bitcoin
Bitcoin
$116,638
The founder of crypto asset management firm Capriole Investments said Bitcoin is expected to trade at $167,800 per coin if the price matches its 'energy value.'
In a post on X on Thursday, Charles Edwards calculated that the true value of Bitcoin is about 45% higher than its current value of $116,000.
The 'fair value' for Bitcoin requires a price increase of 45%.
Bitcoin miners hold the key to predicting the extremely high BTC price, which is expected to rise by about 50%.
Capriole's 'energy value' metric for Bitcoin, established in 2019, claims that the correct price for Bitcoin, or 'fair value,' is 'a function of energy inputs and the rate of supply growth, and a constant that represents the dollar value of energy.'
While this means that BTC/USD should be zero if miners completely stop participating in the network, current standard hash rates show that Bitcoin is worth nothing at all.
Data from the on-chain analytics platform Glassnode indicates that the current hash rate - the combined processing power dedicated to the network by miners - is 1.031 zettahashes per second (ZH/s), with the latest all-time high recorded on August 4.
Average Bitcoin hash rate. Source: Glassnode
Edwards stated, referring to the simple moving average (SMA), 'Hash rates are soaring and Bitcoin's energy value just reached $145,000.'
"This means the price is 31% lower than the value."
Bitcoin energy value data. Source: Capriole Investments
The value of Bitcoin has reached $167,800. The network fundamentals vary significantly from its price, which has declined by about 10% since its record peak last month.
Edwards added: 'We are currently trading at a deeper discount to value at $116,000, compared to what Bitcoin was priced at when it was at $10,000 in September 2020.'
Bitcoin price vs. returning to the mean
As Cointelegraph noted, many market participants said the current rise in Bitcoin's price has only a few months left.
Related: Bitcoin supply shock could lead to 'unlocking' Bitcoin price as OTC trading desks dry up.
This gives the BTC price little time to match its energy value rating, which will decrease if miners reduce the amount of energy they use.
Capriole stated in the introduction to the metric: 'The stability of energy inputs represents a balance between supply and demand. Rising market prices stimulate increased energy inputs through growth in mining power and technological improvements, leading to enhanced energy efficiency.'
For this reason, large increases in market price usually lead to long-term increases in energy used, thus increasing Bitcoin's energy value. However, when speculation causes a massive price increase without a corresponding increase in energy inputs, the price historically collapses back to the energy value.
Bitcoin hash ribbons data. Source: Capriole Investments
The Bitcoin Hash Ribbons metric continues to bolster healthy expectations for both miners and price performance after the recent 'buy signal' emerged in late July.
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