Investment
Compared to Commodities, Bitcoin’s Market Price is Dislocated Management Relative to its Marginal Production Cost Division
Oil, Gold and Bitcoin: Marginal Production Cost versus Current Market Price
8000 - = Marginal Production Cost Current Market Price (% above marginal production cost) 4 $6,517 7000 (350%) ° 6000 | 5000 + 4000 | 3000 + 2088 9 $1,278 $1200-1700 (+50%) s,s, ¢
1000 | $850
0 4
Crude Oil (WTI) Gold Bitcoin
= Bitcoin tokens possesses no physicality, a criteria for traditional commodities. = Compared to other commodities, Bitcoin’s market price stands far above its marginal production cost. — Gold miners’ and oil drillers’ revenues stand 50% and 8% above their marginal production costs, respectively.
— Bitcoin miners’ revenue per bitcoin stands approximately 350% above their electricity expenditures.
(1) Peter C.B. Phillips, Shu-Ping Shi and Jun Yu, “Testing for Multiple Bubbles: Historical Episodes of Exuberance and Collapse in the S&P 500,” International Economic Review, Oct 28, 2015.
Source: Investment Strategy Group, Bloomberg. 16
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