Only once before has BTC been such a good value compared to the hash rate, which was well ahead of its all-time high set in 2017. A simple yet elegant bitcoin BTC costs $20,501.
The price metric is back at pre-2017 bull market lows. As noted by its creator, Charles Edwards, CEO of wealth manager Capriole, Bitcoin Yardstick is now at its second-lowest level ever.
Yardstick prints the second-lowest reading ever
As on-chain metrics converge to establish a classic macro bottom for BTC/USD, a new candidate suggests that Bitcoin is even more oversold than the average holder believes. Bitcoin Yardstick measures the ratio between Bitcoin’s market cap and hash rate: two fundamental metrics that provide important price information when compared. As Edwards explains, the lower the value, the “cheaper” the bitcoin is: a higher hash rate is applied to secure low-priced coins.
While it is noted that this is “not investment advice,” this has implications for potential buyers: much of the unrealized value lies in the amount of work that goes into maintaining the supply of Bitcoin during the ensure price suppression. Currently, the Bitcoin network hash rate is close to all-time highs, while the price was down around 75% from its last all-time high in November 2021.
“According to Edwards, “Today we witness the second lowest number for the Bitcoin Yardstick in the entire history of Bitcoin. This suggests that given the amount of power that goes into the most powerful computer network in the world, bitcoin is extraordinarily cheap in comparison.
The bitcoin hash rate keeps going
The Yardstick promotes the concept of Proof of Work (PoW), the Bitcoin network’s mining algorithm 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 the idea.
Meanwhile, the bull market years of 2013 and 2017 saw the opposite of the current scenario, where the price is high relative to the work done. In 2021, multiple spikes accompanied Bitcoin’s double top in April and November, respectively. But none matched the magnitude of the previous peaks.
Despite the skyrocketing hash rate, bitcoin miners are under significant stress as profit margins shrink. A miner “surrender” period occurred as early as the summer, with Edwards providing evidence of an ongoing recovery in August.