Bitcoin: End-of-Year Price Prediction & Treasury Stock Analogy | Hashpower Academy

Video Transcript:

Hello there and welcome to the Hashpower Academy, your place to learn anything to do with Bitcoin. The topic of today’s video is looking at what we think the end of year Bitcoin price will be for 2025. Now the first thing to understand is that Bitcoin price is charting new territory, writing new history. There is no support and resistances along other than psychological levels of 120, 130, 200, 250, 1 million like these whole numbers are more psychological levels. So charting out where we think price will go is a guess. But there is another side to Bitcoin that you may not be familiar to, which is the mining side defining a different type of understanding of the value of Bitcoin. And you can compare the value price of Bitcoin to the market price. The value price is what I’m talking about is from electricity. Now, where this gets interesting is that Bitcoin miners are producing Bitcoin at that lower rate. And when you compare the price to production, you can understand the price as a premium. And this is exactly like the way people are understanding these Bitcoin treasury stocks, which is companies buying up Bitcoin to store on their balance sheet, which they can divide down to an amount of Bitcoin per share. The amount of Bitcoin per share is what is important to people. And the shares trade at a slightly higher price or even a multiple. And if the share price is of a very high multiple to a tiny amount of Bitcoin per share trade the shares are trading too high and a very high premium. There’s several reasons for this but we can analogize this across to the Bitcoin network itself and use the Bitcoin price as the de facto share price and the value per Bitcoin being the electrical cost because the exchange rate goes both ways. That is topic that you can delve into in many other videos in this entire academy. But this particular video, we’re going to use a new form of production floor end ofear guess of how much hash rates online. Understand how much block rewards are being paid out, maybe a difference in fees, how much energy side has to be deployed to actually get this hash rate out. And that defines a production floor that we can build a guesstimate price on top. So some educational proof of work required but let’s dive in. So 900 xahash the network hash rate the amount miners out there actively plugged in energized racing to find the next block in the chain and earn that freshly mined bitcoin. Now the production flaw is understood by understanding well the cost of energy input versus how much bitcoin output they get. Now, if we’re going to use the endofear price and production predictions, we got to think how much hash rate is going to come in line. Now, it would be amazing for a 100x hash to come online and there’d be up to a,000 xash or one zeta in scientific units. We’re just going to do 50. And we’re going to help you understand why. Because 50 x aash at 20 jewels per terahash you multiply 50 * 20 that is a,000 megawws because you think the 900 xash produced at 20 jewels per terahash is 18,000 megawatt which is a lot of power. So to get another 50x of hash online, we would need approximately another thousand megawws of power online. So the point I’m trying to make just very early on and it sounds all technical but there is a physical constraint on the physical side of the network that land power contracts and infrastructure all has to be built. It does. It’s not the same as the reactiveness of the digital side where a load of demand floods into exchanges and dollars and whatnot and driving that price up. That the network growth is physically constrained and slower in bull cycles. And that’s where the opportunity to mine comes in because the difficulty adjustment cannot increase as quick as quickly as the price does. And if price as a percentage increases quicker than production, mining profitability increases. But that gap of production to price is also what we can gauge this price prediction not just for the end of the year but going into the peak of the bull market idea as well. So 50x a hash 20 jewels terraash is a,000 megawws. And for other perspectives if that was $20 uh per terahash believe that is another billion. So we need another billion dollars of just the hardware thousand megawws that’s several hundred million dollars of infrastructure. So you need maybe one to two billion dollars worth of infrastructure just for the network to grow a tiny amount. Now where price gets into this is we’re going to look at say um the the profitability of mining to get this production floor and multiply up to get a gauge of price. So 456 bitcoin per day 144 blocks uh down to an hour that is easy numbers 19 bitcoin distributed to the entire network per hour. 19 bitcoin per hour is currently what the entire network is being paid to secure the network. the security budget. 19 Bitcoin being earned by 19,000 megawws. Divide it down. That’s 0.01 Bitcoin multiplied by the price 1205. That’s about $120 per megawatt. So a minor plugging in right now with an estimate say 50x hash more online you’re going to earn about $120 per megawatt hour. Now if the price average we’re going to be nice and say $60 per megawatt hour it means that price of Bitcoin right now is two times production. If the average of the network is still confidently at about $60,000 to the current price, that’s a 2x. But the peak of the bull market bull market trend is always pushing that four times production. And for the other reason that if fees increase, it means this energy that’s online earning this 19 bitcoin. Well, if that jumps to 20, 21, 22, 25, the bitcoin per cure hour increases. So comparing it to price, the the multiplier goes up because the price didn’t change, it’s just production cost went down. So the margin is wider. Again, the analogy for this is Michael Sailor and his share prices and his underlying value per share and the gap between these two is the premium. And when there’s too much premium between producers earning loads because the price is really high. Um, but this is this is natural commodity cycles you see across lots of industries. When there’s a rush into the price of gold and everyone can produce gold at say $1,000 an ounce and then the price jumps to 3,000, they’re making more money. And if the price goes higher and higher, their their costs are for the Bitcoin example, the costs are dollarized and the price can just take off. The margins get wider. But with Bitcoin, you can’t you can’t extract more Bitcoin if the price is even higher. You can only extract what the network is offering in this decentralized protocol. So, boils down to a production cost of around 60,000. Let’s just do 60k. So, over 60,000 production cost estimate for the miners, assuming they’re physically constrained and fees aren’t too crazy because this is the other thing. Ever since there’s been this continual development of layer 2s, there is less transaction volume in layer 1 because well, everyone’s trying to avoid paying fees, but fees are also the economic incentive beyond subsidy to circulate to the miners to build out the network and secure it and make energy cheaper on a Bitcoin unit of account. $60,000. Now historically across price and I need to do a video um with just you know screen recording and going into different charts and metrics and details which there is some interesting collaborations coming up soon um where they’ll explore more of the charts of the things that I mentioned. So what I’m trying to say here is price right now to what we think production floor will be 60 70k maybe is double. Now the easy guess is to say 3x to 4x and that’s what I think is confidently the higher price of this cycle. So yeah 180 to 240 to the end of the year. Now this is for several reasons. I think 200 is that another 100k psychological level. We may hit it bounce around or just fluctuate between these two figures. And I think that’s a healthy amount of premium to production which also means that miners are going to be making four times if not even more money because they’re fixed costs um you know they’re in contracts to buy electricity at a certain rate which exchanges into Bitcoin that has this really high dollar value at these higher prices. What this does is create a healthy environment. Now earlier in earlier cycles the price to production cost ratio was as high as 8x but I’ve charted out this before by looking at the production cost at the point of time that it’s the all-time high which was always between four to eight times production. The last cycle it was 4x before that it was 4x I think before that it was 8x. So there may be this diminishing return. So, saying 3 to 4x is a natural average. But yeah, 200k, maybe we should all do 200 push-ups to 200k. You never know. Um, yeah, thank you for listening. I hope you enjoyed this video. I’ll be back and I’ll be creating lots more content. There is lots of interesting stuff in the description. YouTube have demonetized me, so I’ve got to find other ways to monetize. Thank you for listening. Hope you enjoyed, and I will see you in the next video. Goodbye.