Bitcoin's Hash Rate Suggests Undervaluation Amid Price Slump
Bitcoin's current price has been scrutinized by analysts and investors alike. According to 'cycle theory', which is not empirically proven but can be a useful framework, Bitcoin looks cheap compared to its past market cycles. As of September 1, the price of $77,155 is 38% below its last all-time high near $126,080 set in October 2025.
One way to determine whether Bitcoin is undervalued or overvalued is to look at the average hash rate across different intervals. A declining hash rate suggests that the network will need to self-correct, which is most likely to occur when the coin's price is lowest. The hash rate remains about 33% below its September 2025 peak despite starting to edge slightly higher in August.
Charles Edwards, founder of Capriole Investments, told Cointelegraph on July 24 that Bitcoin was trading about 40% below its energy value. Today, the coin's energy value is around $107,773, implying a discount of roughly 27%, which means it's still quite undervalued.