Bitcoin may be trading in a “deep value” zone relative to its network fundamentals, according to Capriole Investments founder Charles Edwards. In a recent post on X, Edwards said his Bitcoin Yardstick indicator is “off the chart” in undervalued territory, suggesting the asset is inexpensive when compared with the strength of its mining network.
What Is the Bitcoin Yardstick?
The Bitcoin Yardstick is a valuation metric created by Edwards that compares Bitcoin’s market value to its network hash rate — the aggregate computing power securing the blockchain. In broad terms, lower Yardstick readings indicate Bitcoin is cheaper relative to the energy and capital securing the network, while higher readings suggest the opposite.
Historically, deeply depressed Yardstick levels have tended to appear near cyclical market lows, when price lags behind sustained growth in hash rate. While this relationship has provided useful context for long-term investors, it is not a timing tool and does not guarantee future performance.
Edwards: Indicator in “Deep Value”
Edwards noted that the current Yardstick reading sits well inside its undervalued band, describing it as “off the chart.” The observation points to a notable divergence: miners continue to invest and expand network hash power, while price has not fully reflected that growth on a relative basis.
Such conditions have previously emerged after major drawdowns and periods of network expansion. Analysts often view these episodes as phases when the market prices Bitcoin below the implied strength of its underlying security and production environment.
Why It Matters
On-chain and network-based indicators like the Bitcoin Yardstick are watched alongside other gauges — including metrics such as MVRV ratios and miner revenue measures — to assess whether Bitcoin appears rich or cheap versus its fundamentals. While no single indicator should be used in isolation, the Yardstick’s current reading adds to the view that network growth has outpaced price in recent months.
Edwards did not provide a specific timeline or price target, emphasizing instead the relative-value signal implied by the latest Yardstick level.