Bitcoin at $1 Million – Why Not?

I tend to think that bitcoin has no fundamentals other than the fixed supply and it is all about charts. It turns out there is a bit more to it than that because of something called the hash factor. According to this hash factor bitcoin is cheap and this is why the price is hanging in there around $20,000 and may be poised to rocket higher (see below on where the price is now).

At this point I was going to explain what the hash rate is but having studied it I realise we don't have enough wet towels to wrap around our burning brows to go there. This is serious overheated brain territory best left to men with giant foreheads and powers of concentration unimaginable to lesser mortals.

Bitcoin and the hash factor

I have read a whole article on this subject and I am totally baffled so I am going to leap straight to the conclusions.

“Today we are seeing the second lowest reading for the Bitcoin Yardstick in all of Bitcoin’s history. 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.

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."

Cryptoglobe. 2 November 2022

There is another barometer according to which bitcoin is historically cheap

Notably, the percentage of coins held for at least a year has risen from nearly 54pc on Oct. 28, 2021, to a record high of 66pc on Oct. 28, 2022, data shows.

As of Oct. 31, the old coins comprise nearly 78pc of the Bitcoin supply in circulation versus younger coins’ 22pc, thus reducing the likelihood of intense sell-offs while forming a potential market bottom.

CoinTelegraph, 2 November 2022

It turns out that bitcoin is in a similar limbo land to Apple and Tesla where the fundamentals point up but the chart is undecided and threatening a major breakdown. For holders, it is squeaky bum time; for the rest of us it is time to watch and wait bearing in mind predictions from sources such as ARK funds group founder, Cathy Wood, that bitcoin could go to $1m, one day.