Only once before has BTC been such good value versus hash rate — and that was long before even the 2017 all-time high.
A simple but elegant Bitcoin (BTC) price metric has returned to lows from before the 2017 bull market.
Yardstick prints second-lowest reading ever
As on-chain metrics converge to put in a classic macro bottom for BTC/USD, a new candidate is suggesting that Bitcoin is even more oversold than the average hodler believes.
The Bitcoin Yardstick measures the ratio of Bitcoin market cap to hash rate — two fundamental metrics which, when compared to one another, offer key price insights.
As Edwards explains, the lower the value, the “cheaper” Bitcoin is — more hash rate is being applied to secure low-priced coins.
While he cautions that it is “not investment advice,” this has implications for would-be buyers — much unrealized value lies in the amount of work done to secure the Bitcoin supply during price suppression.
Currently, Bitcoin network hash rate is near all-time highs, while 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 in all of Bitcoin’s history,” Edwards commented.
“This means that on a relative basis, Bitcoin is extraordinarily cheap given the amount of energy being used on what is the most powerful computer network in the world.”Bitcoin Yardstick annotated chart. Source: Charles Edwards/ Twitter
Bitcoin hash rate keeps going
The Yardstick feeds into 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 academic Saifedean Ammous, focuses heavily on the idea.
The opposite of the current scenario, meanwhile, where price is high compared to work done, occurred during the 2013 and 2017 bull market years.
In 2021, several spikes accompanied Bitcoin’s double top in April and November, respectively, but none matched the scale of the prior peaks.
Bitcoin Yardstick chart. Source: Glassnode
As Cointelegraph reported, Bitcoin miners are under considerable stress despite mushrooming hash rate as profit margins get squeezed.
The summer already saw a period of miner “capitulation,” with Edwards laying out evidence of the recovery underway in August.
Bitcoin hash rate chart. Source: Blockchain
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