Schwab Researcher Sees Bitcoin Fair Value at $95,000 Amid Mining Economics

Charles Schwab's Head of Crypto Research, Jim Ferraioli, believes that Bitcoin's fair value could be closer to $95,000. His valuation is based primarily on Bitcoin's mining economics, rather than short-term market sentiment.

Ferraioli explained that the most efficient Bitcoin miners currently produce BTC at a cost of around $60,000, while less efficient miners are closer to $95,000. He drew a comparison with traditional commodity markets, saying producers generally operate on relatively thin margins, making production costs a useful benchmark for estimating fair value.

The lower mining-cost estimate of around $60,000 represents a potential fundamental support zone and aligns with Bitcoin's 200-week moving average, which has recently been around the $60,000, $62,000 range. Ferraioli emphasized that this figure isn't a price target, but rather a valuation based on the economics of Bitcoin production.

While the crypto market is currently in a seasonally weaker period, often referred to as 'Bitcoin winter', Ferraioli pointed out that risk assets have historically performed better toward the end of the year. He suggested that there could be room for a potential year-end rally if market conditions improve.