Bitcoin News Today: Bitcoin Trades 31% Below Energy Value Model Estimate of $145,000

Bitcoin is currently trading at a significant discount to its so-called “Energy Value,” according to Charles Edwards, founder of Capriole Investments. Edwards calculates that the cryptocurrency’s fair value, based on a proprietary model developed in 2019, could reach as high as $167,800. The model evaluates Bitcoin’s valuation through a combination of energy input, supply growth rate, and a constant representing the fiat dollar value of energy [1].

Edwards explained in a recent post on X that the current price of around $116,000 is approximately 45% below the level suggested by the Energy Value model. This metric links Bitcoin’s fair value directly to the cost and scale of mining activity. If miners were to shut down entirely, the model suggests Bitcoin would be worth zero. However, record hashrates—measuring the computing power securing the network—indicate a strong valuation [1].

According to Glassnode data, Bitcoin’s hashrate recently reached 1.031 zettahashes per second, hitting an all-time high on August 4. Edwards noted that this has driven the Energy Value to $145,000, which implies the market price is trading at a 31% discount. He added that the current discount is deeper than in September 2020, when Bitcoin was at $10,000 [1].

The model suggests that sustained price growth relies on consistent energy input. Higher market prices incentivize miners to increase hash power and improve efficiency. Historically, when Bitcoin’s price surges without a corresponding increase in energy input, it tends to fall back toward its Energy Value [1].

Despite the bullish implications of the model, Edwards warned that the fair value could decline if miners reduce their energy commitment. This highlights the importance of miner activity in maintaining Bitcoin’s long-term valuation [1].

Other analysts and institutions have also expressed bullish forecasts for Bitcoin. Standard Chartered predicted in February that Bitcoin could reach $200,000 by the end of 2025, driven by institutional flows, particularly from pension funds [1]. Similarly, billionaire hedge fund manager Philippe Laffont included Bitcoin in his “Fantastic 40,” a list of top investment opportunities for the next five years, placing it alongside major tech firms like Microsoft and Nvidia [1].

Additionally, Shunyet Jan of Bybit projected Bitcoin could reach $125,000 by the end of Q2 2025, assuming current trends persist. Meanwhile, crypto analyst Scott Melker expects Bitcoin to surge to $250,000 by the end of 2025, driven by growing institutional demand and a maturing market structure [1].

These forecasts highlight a broader consensus among industry participants that Bitcoin’s long-term value could be significantly higher than its current price. However, as with all financial predictions, actual performance may vary.

Source:

[1] Capriole Founder Says Bitcoin’s Energy Value Puts Price at $167.8K – https://cryptonews.com/news/capriole-founder-says-bitcoins-energy-value-puts-price-at-167-8k/