Crypto Analyst: ‘This Is Historically the Optimal Time To Allocate to Bitcoin’

On Tuesday (22 November 2022), Charles Edwards, Co-Founder of digital asset management firm Capriole Investments, thinks this might be a great time to buy Bitcoin ($BTC).

Edwards told his over 85K Twitter followers earlier today:

Today, Edwards also reacted to a report by Cointelegraph about Iris Energy becoming the latest Bitcoin mining firm to “suffer from the squeeze of the crypto bear market, losing a significant chunk of its mining power after defaulting on a loan.” The report went on to say that “a filing by the firm to the U.S. Securities and Exchange Commission on Nov. 21 revealed that it has unplugged its hardware used as collateral in a $107.8 million loan as of Nov. 18.”

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

“It’s a Bitcoin miner bloodbath. Most aggressive miner selling in almost 7 years now. Up 400% in just 3 weeks! If price doesn’t go up soon, we are going to see a lot of Bitcoin miners out of business… What we are seeing is not sustainable. Mine-and-hodl is not a viable strategy as a Bitcoin miner. Miners are paying the consequences of the ‘never selling’ arrogance widespread just 6 months ago. You need to manage (trade) your Bitcoin position constantly in this market… Any strategy which relies on long-term leverage (positions which can’t be exited immediately) ALWAYS blows up in crypto.“

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

He went on to say:

“Similar in concept to a PE Ratio, except instead of stock earnings, the Bitcoin Yardstick is taking the ratio of energy work done to secure the Bitcoin network in relation to price. Lower readings = cheaper Bitcoin = better value…

“Here’s an application of the Bitcoin Yardstick which identifies when Bitcoin is: – Cheap: Yardstick > 1 deviation under the mean – Risky: Yardstick > 2 deviations above the mean – Expensive: Yardstick > 3 deviations above the mean…

“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.“

According to data by CryptoCompare, Bitcoin is currently (i.e. as of 4:55 p.m. UTC on 22 November 2022) trading around $16,191, up 0.52% in the past 24-hour period. The current $BTC price is roughly 76.5% lower than the all-time high of $69,044 reached on 10 November 2021.

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