Bitcoin, the first and largest cryptocurrency by market capitalization, could be significantly undervalued, according to Charles Edwards, analyst and founder of Capriole Investments.
In a recent tweet, Edwards noted that Bitcoin Energy Value is at $130,000, sharing alongside his tweet a Bitcoin (BTC/USD 1 day) chart superimposed with the Bitcoin energy value. This figure places Bitcoin at a massive 40% discount from its current market price of over $94,000.
The Bitcoin Energy Value, a valuation model developed by Edwards, estimates the intrinsic value of Bitcoin as priced by raw joules of electricity entering the mining network.
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The observation comes one year after Bitcoin’s fourth halving, a historical event known to tighten supply and frequently precede major bull runs, with Edwards noting that Bitcoin is trading at a whopping 40% discount to its intrinsic value.
Bitcoin has climbed back above $94,000 in a broad relief rally, with the market regaining key levels. In Bitcoin’s case, it has breached its daily SMA 50 and 200 at $84,501 and $88,857, which had constricted its price since early February.
Bitcoin rebounds
After weeks of lackluster activity and lower liquidity conditions, the market has finally responded positively to a broader macro catalyst, with both equities and cryptocurrencies rallying higher.
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Taken from April 19, Bitcoin has marked six consecutive days in green. Tuesday’s surge was the largest when Bitcoin rose from $87,077 to $93,952. In the following sessions, Bitcoin surpassed $94,000, around where it currently trades.
At press time, Bitcoin was up 1.88% in the last 24 hours to $94,266, having previously reached $94,499, its highest level since March 3, and up 11% weekly.
During Bitcoin’s recent rally to $94,000, the U.S. spot Bitcoin ETFs saw a whopping $1.54 billion in net inflows in a single day, one of the largest daily inflows since their launch. This surge gives a strong signal that Bitcoin demand might be beginning to recover.
