Bitcoin has achieved a major milestone, reaching a staggering $81,000 in energy value – the intrinsic value of Bitcoin, valued in gross joules of electricity in the mining network alone.
Bitcoin has achieved a major milestone, reaching a staggering $81,000 in energy value – the intrinsic value of Bitcoin, valued in gross joules of electricity in the mining network alone.
Carlos Edwardsthe founder of Capriole Fund, tweeted this milestone shortly after Bitcoin reached a new ATH, surpassing $72,000.
Bitcoin’s energy value puts its fair value at $81,000, 14% higher than the current trading price, and it has implications. The energy needed to power Bitcoin mining is determined by two factors: the hash rate to solve the SHA-256 algorithm and the energy efficiency of the mining hardware itself.
The fair value of Bitcoin can be represented as a function of the joules of energy expended to produce it and is a function of the energy input, the rate of supply growth, and a constant representing the fiat value of energy in dollars.
Sharp declines in energy input often mean good times to exit the market, and strong growth in energy input has often meant good times to buy.
Bitcoin, the world’s largest cryptocurrency by market value, hit $71,000 for the first time, bringing this year’s gain to around 70% thanks to huge inflows into US exchange-traded funds. At the time of writing, BTC was up 3.12% in the previous 24 hours to $71,835 after hitting a new ATH of $72,422.
Bitcoin Miners Gain Power at Record Rate
As reported by BloombergBitcoin miners are extracting energy at an unprecedented rate, signaling a return to survival mode.
The increase in activity is sparked by a rise in the price of Bitcoin, driven by several factors, such as the launch of Bitcoin exchange-traded funds (ETFs) and the impending quadrennial event known as the halving, scheduled for April.
Bloomberg cited data compiled by TheMinerMag based on public filings, noting that since February 2023, 13 major mining companies have collectively placed orders for more than $1 billion in specialized computers.
Platforms CleanSpark and Riot have each spent significant sums, investing up to $473 million and $415 million, respectively, to acquire these platforms.
