On Sunday (February 16), Charles Edwards, Co-Founder of digital asset management firm Capriole Investments said that, based on Bitcoin’s Energy Value, it is likely that the BTC price will reach $100K within the next five years.

As Edwards explained in a blog post published on 13 December 2019, he believes that “Bitcoin’s fair value is a function of energy input, supply growth rate and a constant representing the fiat dollar value of energy,” which led him to come up with the following equation that shows how we can determine Bitcoin’s Energy Value (V):

V = (Energy Input / Supply Growth Rate) * f


  • “Energy Input (unit: Watts) = Hash Rate (GH/s) * Mining Energy Efficiency (J/GH)”
  • “Supply Growth Rate (unit: s-1) = Annual increase in circulating Bitcoins, equivalent to the inverse of Stock-to-Flow. Calculated as the annual rate (unit: year-1) of change in circulating Bitcoins and then converted to seconds”
  • “Fiat Factor ($USD/Joule) = A constant conversion factor to allow for the fiat USD value of energy”

Edwards then simplied this equation further (since “all units of hash rate and supply rate cancel out”), which meant that he was able to conclude that “he fair value of Bitcoin (V) can be represented as a function of the Joules of energy spent to produce it.”

Then, yesterday (February 16), Edwards explained via a tweetstorm that since Bitcoin’s Energy Value depends on Hash Rate (HR) and Mining Hardware Efficiency, by predicting what the values of these two variables will be in 2025, we can predict what the Energy Value will be at that time: 

Edwards expects the annual hash rate growth rate to drop to around 20% by 2025: 

He expects the annual rate of improvement in mining hardware efficiency to drop to around 16% by 2025:

He then says that this means a fair value of $100K for Bitcoin by 2025:

Interestingly, he also points out that this $100K forecast is a conservative estimate:


Featured Image by “pattymalajak” via Pixabay.com