Bitcoin Could Be 50% Undervalued. Should You Buy It Right Now?

That could eventually create a supply shock that will drive prices up again.

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.

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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.