Definition ∞ An economic value floor represents the minimum perceived or actual worth of a digital asset, below which its price is unlikely to fall due to fundamental utility, scarcity, or production cost. This concept considers the underlying resources or services required to create or maintain the asset. It provides a theoretical lower bound for valuation, distinct from speculative market fluctuations. The floor can be influenced by factors such as mining costs for proof-of-work cryptocurrencies.
Context ∞ Discussions around an economic value floor frequently appear in analyses of Bitcoin and other proof-of-work assets, particularly during bear markets. News reports may reference this concept when assessing long-term investment viability or comparing different valuation models. Understanding the economic value floor assists in evaluating an asset’s intrinsic support against extreme price depreciation.
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