Key Points
-
Bitcoin is likely priced well below its production costs.
-
That’ll encourage its miners to stop mining.
-
That could eventually create a supply shock that will drive prices up again.
- 10 stocks we like better than Bitcoin ›
On June 5, Bitcoin (CRYPTO: BTC) slipped below the psychologically important $60,000 level for the first time since 2024, and it’s priced near $61,800 on June 10. After its anemic price action over the last few months, the coin could be undervalued by at least one important metric by about 50%, suggesting those who buy it now could reap the benefits down the line.
So, should you buy Bitcoin right now? Let’s take a look at the argument for it being undervalued.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
The case for Bitcoin being at a massive discount right now
Miners produce Bitcoin.
Those miners own large banks of mining rigs, which require capital to purchase, operate, and maintain. Their operating costs are closely tied to electricity prices, as their rigs consume a lot of energy to perform the computations required to mine the coin. When everything works as intended, the capital expenditures and operating costs incurred by miners get recouped by the Bitcoin they produce, which they can sell to the market whenever they choose.
The cost to produce a new Bitcoin varies based on factors such as overhead expenses, hardware costs, average expected electricity costs, and the network’s mining difficulty. A few different estimates placed the average cost to mine 1 BTC at approximately $87,000 as of February, so Bitcoin is changing hands for significantly less than it costs to create.
That tends to encourage miners to take their production offline, which, in turn, eventually constrains supply, pushing the coin’s price back upward and attracting miners back to production.
But there’s more than one school of thought on how to calculate the coin’s valuation.
Using an alternative (but still valid) approach that calculates the coin’s value based on the amount of energy being consumed by the entire Bitcoin network to create one coin, Bitcoin’s modeled fair value is somewhere around $118,000 today; this method is focused more on realized energy expenditures rather than predicted ones, and it doesn’t consider the cost of capital expenditures or overhead. That means the asset could be priced at a discount of roughly 40% to 50%.
Should you buy it right now?
Energy value is just one lens to evaluate Bitcoin’s valuation, and it isn’t comprehensive. The coin is also highly affected by capital flows from Bitcoin exchange-traded funds (ETFs), liquidity, and macro shocks, and each of those factors is likely more influential for its price than any mining formula.
For someone planning to be a long-term holder, buying the coin at or below its production cost has rewarded patience before, but it tends to be a long process that unfolds over a few quarters. Therefore, the best move here is to dollar-cost average (DCA), buying a fixed amount of the coin on a schedule. If the coin dips more, you’ll be buying it at an even deeper discount relative to its production costs.
Should you buy stock in Bitcoin right now?
Before you buy stock in Bitcoin, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bitcoin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $442,220!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,230,114!*
Now, it’s worth noting Stock Advisor’s total average return is 926% — a market-crushing outperformance compared to 203% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of June 11, 2026.
Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
