The upward movement for the leading cryptocurrency, Bitcoin, was again cut short. Yesterday, after starting the new week above $65,000, BTC fell to $63,000 due to a sharp sell-off in Asian markets related to chip trading and renewed fears about a Fed interest rate hike.
As BTC continues to experience sharp declines due to macroeconomic developments, a well-known figure has determined the fair value of Bitcoin to be $95,000.
Jim Ferraioli, Head of Crypto Research at Charles Schwab, a leading figure in the cryptocurrency market, argued that Bitcoin’s fair value, regardless of its current market price, is around $95,000.
Ferraioli stated that this assessment was based on the Bitcoin mining economics rather than short-term market sentiment.
Speaking to Coindesk, Ferraioli emphasized that one of the most important indicators in Bitcoin’s valuation is its production costs.
He noted that the most efficient miners produce one BTC at a cost of approximately $60,000, while for lower-efficiency miners, this figure can rise to $95,000.
Comparing it to traditional commodity markets, Ferraioli noted that producers generally operate with relatively low profit margins, and said that for BTC, production costs are an important metric for estimating its fair value.
However, he added that the $95,000 level is not a price target for BTC, but merely a valuation or forecast based on economic data.
$60,000 Could Be a Strong Support Level for Bitcoin!
According to Ferraioli, a mining cost of approximately $60,000 constitutes a significant fundamental support level for Bitcoin.
This level also coincides with Bitcoin’s 200-week moving average, which has recently been in the $60,000–$62,000 range.
Ferraioli concluded by adding that it is impossible to predict whether Bitcoin will reach $95,000 within the next six months.
*This is not investment advice.
Continue Reading: Charles Schwab Calculated and Explained the Fair Value of Bitcoin (BTC) Price! Here’s What It Should Be!