Bitcoin Trades 40% Below Intrinsic Value Amid Institutional Buying Spree

Bitcoin is currently trading at a 40% discount to its intrinsic value, according to Capriole Investments founder Charles Edwards. Edwards highlighted that since the April 2024 halving, which reduced block rewards to 3.125 BTC, Bitcoin’s energy value—an estimate based on mining costs and energy consumption—stands at $130,000. This significant discrepancy between the market price and the intrinsic value suggests that Bitcoin is undervalued, presenting a potential buying opportunity for investors.

Recent data from CryptoQuant indicated that over 8,756 BTC ($830 million) were withdrawn from Coinbase on April 24. This large withdrawal could point toward institutional buying or ETF-related purchases, reflecting underlying demand for Bitcoin. Additionally, Binance witnessed exchange outflows of 27,750 BTC on April 25, marking the third largest Bitcoin outflow in the exchange’s history. These outflows suggest that investors are moving their Bitcoin holdings off exchanges, potentially to hold them in personal wallets or to transfer them to other platforms.

This development aligns with the spot Bitcoin ETF inflows witnessed this week. Institutions went on a $3 billion ‘Bitcoin bender’ over the past few days, indicating a strong institutional interest in Bitcoin. The significant inflow into spot BTC ETFs suggests that institutional investors are increasingly viewing Bitcoin as a valuable addition to their portfolios. This buying spree has likely contributed to the perceived discount, as the increased demand has not yet been fully reflected in the spot price of Bitcoin.

The surge in spot BTC ETF buying and the resulting discount in Bitcoin's price present an intriguing scenario for market participants. While the discount may be seen as a buying opportunity, it also underscores the volatility and unpredictability of Bitcoin's price movements. Investors should approach this situation with caution, conducting thorough research and considering their risk tolerance before making any investment decisions. The current situation highlights the complex nature of the cryptocurrency market, where various factors can influence price movements and investor sentiment.

Bitcoin’s weekly performance marks its highest return in 2025 and its most significant uptick since November 2024. The BTC price also reflects identical price action, mirroring its behavior from Q4, 2024. As illustrated in the 1-day chart, Bitcoin is consolidating at a higher range after its breakout, similar to its behavior from Q4, 2024. After a 13% rise between Nov. 5-9, BTC posted another 15% increase during Nov. 10-11. The breakout took place during the weekend as well. Similarly, BTC prices have risen 11% between April 21-25. With the relative strength index (RSI) also exhibiting similar buying pressure, a 7-10% jump over the next few days could take BTC above $100,000. However, while fractal patterns may repeat, they aren't perfectly reliable. Unlike Q4, when Bitcoin entered price discovery and rallied without resistance, the current overhead resistance level at $96,100 could impede a breakout.