Core Viewpoint - The valuation of Bitcoin is complex due to its lack of cash flows and balance sheet, but energy costs suggest it may be undervalued by around 70% [2][6]. Group 1: Valuation Methods - Traditional valuation methods for stocks are not applicable to Bitcoin, necessitating alternative approaches [1]. - One method indicates Bitcoin's fair value based on energy costs, suggesting a price of approximately $175,400, indicating a potential upside of 70% [6][9]. - The energy-based valuation model by Capriole Investments shows that Bitcoin's price typically aligns with the energy costs of mining, with deviations resolving within 18 months [6][10]. Group 2: Mining Economics - Bitcoin mining involves significant energy and hardware costs, which can be calculated to estimate the all-in costs for producing a Bitcoin [3][4]. - The mining difficulty adjusts based on the number of miners, linking energy input to Bitcoin's price through economic incentives [8][9]. - If Bitcoin's price falls below miners' breakeven levels, less efficient miners will exit, reducing energy input and aligning price with energy value [9]. Group 3: Market Dynamics - The upcoming halving events will reduce new Bitcoin issuance, tightening supply and potentially increasing price with the same demand [10][11]. - Historical performance shows Bitcoin's price has increased by 502% over the last three years, supporting the case for long-term investment [11]. - A dollar-cost averaging strategy is recommended for accumulating Bitcoin, particularly during market downturns [12].