Bitcoin is up a bit in the past week, but still well below fair value
At least according to Charles Edwards.
Charles Edwards of Digital Asset Management, as well as a well-followed crypto analyst and market researcher.
According to his analysis, bitcoin's fair value based on energy consumption should be $10,600 currently:
(Source:
But wait, does energy consumption really tell us anything about bitcoin's price?
According to Edwards, it absolutely does.
His research shows that the price of bitcoin is correlated with its energy consumption to the tune of about 80%.
Not perfect, but that is a pretty good correlation.
And right now, that correlation is saying prices should be up over $10k as shown on that chart above.
More about his research can be seen here:
https://medium.com/capriole/bitcoin-value-energy-equivalence-6d00d1baa34a
Adding to this...
Bitcoin is the highest returning asset over the past decade with the best risk-adjusted returns of any asset.
Which can be measured by its asset-leading sharpe ratio:
(Source:
So, we have an asset that has performed the best of anything else over the past decade trading below what could be considered fair value.
Oh and we are heading into a halving event.
Yea it's a good idea to be long bitcoin right now.
Stay informed my friends.
-Doc