crypto strategy

Crypto Analyst: “This is historically the optimal time to allocate to Bitcoin”

Tuesday (November 22, 2022), Charles Edwards, co-founder of the digital asset management company Capriole Investmentsthink now might be a great time to buy Bitcoin ($BTC).

Edwards told his more than 85,000 Twitter followers earlier today:

Today, Edwards also reacted to a report by Cointelegraph about Iris Energy becoming the latest Bitcoin mining company to “suffer pressure from the crypto bear market, losing significant mining power after defaulting on a loan.” The report went on to say that “a filing by the company with the United States Securities and Exchange Commission on November 21 revealed that he unplugged his equipment used as collateral in a $107.8 million loan as of Nov. 18.

And on Monday (November 21, 2022), Edwards caught on Twitter earlier today to say:

It’s a bitcoin miner bloodbath. The most aggressive miner sold for almost 7 years now. Up to 400% in just 3 weeks! If the price doesn’t rise soon, we’re going to see a lot of Bitcoin miners shutting down… What we’re seeing is not sustainable. Mine-and-hodl is not a viable strategy as a Bitcoin miner. Miners are paying the consequences of the “never sell” arrogance prevalent just 6 months ago. You have to manage (trade) your Bitcoin position constantly in this market…Any strategy that relies on long-term leverage (positions that cannot be exited immediately) ALWAYS explodes in crypto.

On November 2, 2022, Edwards introduced his “Bitcoin Yardstick” metric which is a very simple way to determine how cheap/expensive Bitcoin is at any given time:

He went on to say:

Similar in concept to a PE ratio, except instead of equity earnings, the Bitcoin Yardstick takes the ratio of energy work done to secure the Bitcoin network relative to price. Lower Readings = Cheaper Bitcoin = Better Value…

Here is an application of the Bitcoin Yardstick that identifies when Bitcoin is: – Cheap: Yardstick > 1 deviation below the average – Risky: Yardstick > 2 deviations above the average – Expensive: Yardstick > 3 deviations above the average…

Today we see the second lowest reading for the Bitcoin Yardstick in all of Bitcoin history. This means that on a relative basis Bitcoin is extraordinarily cheap considering the amount of power used on what is the most powerful computer network in the world.

According to data from CryptoCompare, Bitcoin is currently (i.e. 4:55 PM UTC Nov 22, 2022) trading around $16,191, up 0.52% in the last 24 hours. The current price of $BTC is around 76.5% lower than the all-time high of $69,044 reached on November 10, 2021.

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