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On June 5, Bitcoin (BTC) slipped below the psychologically important $60,000 level for the first time since 2024, and it was priced near $61,800 on June 10. After relatively weak price action over the prior few months, the article argues that Bitcoin may be undervalued by at least one key metric by roughly 50%, suggesting potential benefits for investors who buy at current levels.
The argument begins with how new Bitcoin is produced. Miners operate large banks of mining rigs that require capital to purchase, run, and maintain. Their operating costs are closely tied to electricity prices because mining rigs consume significant energy to perform the computations needed to mine Bitcoin.
When miners operate as expected, their capital expenditures and operating costs are recouped through the Bitcoin they produce, which they can sell into the market when they choose. The article notes that the cost to produce 1 BTC depends on overhead expenses, hardware costs, expected electricity costs, and the network’s mining difficulty.
One set of estimates cited in the article placed the average cost to mine 1 BTC at approximately $87,000 as of February. Against that benchmark, Bitcoin was described as trading significantly below the estimated production cost.
The article also presents an alternative valuation method that estimates Bitcoin’s value based on the energy consumed by the entire Bitcoin network to create one coin. Using this approach, Bitcoin’s modeled fair value is described as around $118,000 today, focusing on realized energy expenditures rather than predicted ones and not accounting for capital expenditures or overhead.
Under this energy-based framework, the article estimates Bitcoin could be priced at a discount of roughly 40% to 50%.
The article cautions that energy value is only one lens for assessing Bitcoin’s valuation. It argues that Bitcoin’s price is also heavily influenced by capital flows from Bitcoin exchange-traded funds (ETFs), liquidity conditions, and macroeconomic shocks—factors that may matter more for near-term pricing than mining-cost formulas.
For long-term holders, the article states that buying Bitcoin at or below production cost has historically rewarded patience, but it can take time and may play out over multiple quarters. As a result, it recommends dollar-cost averaging (DCA), buying a fixed amount on a schedule. If the price declines further, the investor would be buying at an even deeper discount relative to production-cost benchmarks.
Coinbase has launched a High Yield USDC vault within its in-app DeFi lending offering, adding a second lending option that provides exposure to a wider range of collateral assets. The product is powered by Morpho infrastructure and uses vault allocations curated by Steakhouse Financial.
