The whole crypto sector went through one of the roughest bear markets in history. However, there are several signals pointing to a growing interest in crypto, provided in the tweet by Charles Edwards, the founder of Capriole fund.
Bitcoin below electrical cost
One of the main ways to measure if Bitcoin is overvalued or undervalued is by looking at its production and electrical cost. Only a few times in history has Bitcoin fallen below its electrical cost. It’s pretty logical as miners want to mine bitcoins and sell them for a higher price.
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It has got pretty tough for Bitcoin miners in 2022. However, it may be a great time for investors as it has been historically proven as one of the best times to buy. Needless to say that on these occasions, it took only a few weeks until Bitcoin rose above the electricity cost again.
Bitcoin production vs electrical cost chart, source: tradingview.com, author: capriole
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