According to Charles Edwards, founder of crypto asset management firm, Capriole Investments, Bitcoin’s Energy value hit an all-time high. That’s not all. The cryptocurrency’s mining hash rate also posted fresh highs yesterday. Will Bitcoin (BTC) price follow next?
As per a tweet posted by Mr. Edwards, Bitcoin’s Energy Value is the cryptocurrency’s ‘intrinsic value.’ This indicator propounded by him has hit new highs and is reason enough to be bullish. This is what he said:
Super bullish.
Bitcoin’s Energy Value just hit an all time high.
#Bitcoin’s intrinsic value has never been higher.
How can you be bearish?
He also attached a chart to back his claim.
The top cryptocurrency’s price is hovering close to $9300, but the above chart shows that it’s Energy Value is $12,815. The SMA (Simple Moving Average) value works out to be $11,427. This is BTC’s fair value, opines Charles.
According to an article that he posted last year in December, only energy (‘raw Joules’) can quantify bitcoin’s fair price. There is a direct correlation, and BTC’s fair value will be greatly affected if power input reduces.
“The Energy Value model states that if all miners were to stop mining Bitcoin tomorrow, the power input would be zero and Bitcoin would be worthless” – Reads a statement.
While there was an uptick in Energy Value, BTC’s mining hash rate didn’t stay behind either. As per data from bitinfocharts, the number was gunning for new highs and hovering around pre-halving levels.
This implies that more miners are pooling in their hash power to lap up the already scarce block rewards. More hash power corresponds to more energy input.
Although it seems that the increasing Bitcoin mining hash rate would perfectly corroborate Mr. Edward’s Energy Value theory, he did face some serious arguments.
One user asked for an explanation of BTC’s Energy Value, to which Charles replied by saying that bitcoin’s 10-year price pattern follows a 1:1 proportionality with mining energy input.
Founder of the Nano foundation Colin LaMahieu jumped in quickly and negated his stance.
Energy consumption follows price, as it’s designed, price doesn’t follow energy consumption.
— Colin LeMahieu (@ColinLeMahieu) July 6, 2020
The war of words went on for quite long especially when Colin opposed the idea of considering ‘cost inputs’ to calculate bitcoin’s value.
Someone asked the crypto asset manager whether increasing Energy Value implies an increasing bitcoin price, to which he replied with affirmation.
The two can’t stay apart for long. Up would make sense.
— Charles Edwards (@caprioleio) July 6, 2020
While this may be true, the latest report from Bloomberg points to a seriously bullish case for Bitcoin. The report calls BTC a ‘Caged Bull Set for Breakout, Eyeing $13,000 Resistance’.
According to analysts belonging to the heavyweight media outlet, BTC is experiencing a sharp upsurge in demand. They also found that the cryptocurrency is maturing, with volatility decreasing greatly compared to the stocks and commodities markets.
Also, the number of active addresses have boosted Bitcoin’s adoption case, due to which BTC could see a rally to the $12,000 price mark.
The post These Two Bitcoin Indicators Just Hit New Highs, Will BTC Price Follow Next? appeared first on CryptoPotato.
