A simple yet elegant bitcoin (BTC) price metric is back to pre-2017 bull market lows.
What he pointed its creator, Charles Edwards, CEO of the asset manager Capriole, the Bitcoin Yardstick metric is now at its second lowest levels ever.
Yardstick metric records second-lowest reading in history
As on-chain metrics converge to put a classic macro bottom for the BTC/USD pair, a new candidate suggests that bitcoin is even more oversold than the average hodler realizes.
The Bitcoin Yardstick measures the relationship between bitcoin’s market capitalization and hash rate, two fundamental metrics that, when compared to each other, provide key price insights.
As Edwards explains, the lower the value, the “cheaper” bitcoin is: more hash rate is applied to secure low-priced coins.
Although he warns that “it is not investment advice”, this has implications for potential buyers: much of the unrealized value lies in the amount of work done to secure the supply of bitcoin during the price suppression.
Currently, Bitcoin network hashrate is near its all-time highs, while its price is down around 75% from its last all-time highs seen in November 2021.
“Today we are seeing the second lowest reading for the Bitcoin Yardstick metric in all of bitcoin history,” Edwards commented.
“This means that, in relative terms, bitcoin is extraordinarily cheap given the amount of energy that is used in what is the most powerful computer network in the world.”
The bitcoin hash rate continues to advance
The Yardstick metric feeds the concept of Proof-of-Work (PoW), the mining algorithm of the Bitcoin network, and its ability to store and grow value over time based on productive activity. “The Bitcoin Standard,” the seminal book by scholar Saifedean Ammous, focuses heavily on this idea.
In the meantime, the opposite scenario to the current one, in which the price is high compared to the work done, occurred during the bull market years of 2013 and 2017.
In 2021, several spikes accompanied bitcoin’s double top in April and November, respectively, but none matched the scale of previous spikes.
As Cointelegraph reported, bitcoin miners are under considerable stress as profit margins shrink.
The summer already saw a period of “capitulation” by the miners; Edwards highlighted the ongoing recovery in August.
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