Following Bitcoin’s monumental run-up to $20,000 in late 2017, prices began to fall, and have barely stopped to breath on the way down. As it stands, the price of BTC has declined by over 60% since its all-time high, rightfully leading some to believe that mining activity fell in correlation with prices. But crypto miners have seemingly shrugged off the drop, with the Bitcoin hashrate establishing new highs on a near-weekly basis.
Bitcoin Hashrate Rises Amidst Bearish Market
While Bitcoin’s hashrate figure has been on an unrelenting crusade upwards for the better part of a decade, in the past 72 hours, Bitcoin’s hashrate has seen a non-linear spike to the upside. As per data compiled by Blockchain, a US-based crypto infrastructure firm, the hashrate of the network saw a 35% run-up on Saturday and Sunday to a breath-taking ATH of 62 EH/s (quadrillion hashes/second)
Many quickly speculated on the source of this astronomical gain. Armin Van Bitcoin, a Canadian cryptocurrency commentator and analyst, took to Twitter to reveal that firms are showing interest in establishing new data centers, showing a picture of hundreds of Antminers up and running in a Kazakhstan facility.
— A v B ⚡ (@ArminVanBitcoin) August 29, 2018
Some theorized that Bitmain and other ASIC manufacturers have begun to exclusively roll out machines that output exorbitant amounts of hashes per second.
Does Price Follow Mining Activity?
Regardless of the reason, many analysts still agree that a surging hashrate statistic may indicate future price action, as such a figure alludes to the amount of interest backing a PoW crypto asset. Max Keiser, journalist, crypto analyst and filmmaker extraordinaire, revealed that according to his “HR analysis,” a new ATH could be within Bitcoin’s grasp in the new future. Keiser added that Bitcoin could reach and surpass $28,000 if hashrates remain steady.
This sentiment was echoed by Bobby Lee, the co-founder of BTCC, who claimed that Bitcoin could reach $60,000 on the back of mining-related costs and the next block halving alone.
After next #BlockRewardHalving in Spring of 2020, new #Bitcoin output will drop again, to just 900 BTC/day.
I predict #HashPower will continue to grow, with ever higher amounts of investment in mining (electricity costs).
If that amount reaches $54m/day, we‘ll have $BTC at $60k.
— Bobby Lee (@bobbyclee) August 25, 2018
Backing this prediction, Lee, who is also Litecoin founder Charlie Lee’s brother, noted that an increased hashrate will see electricity costs pertaining to mining rise as well. He then indicated that this is a case of “simple math” that could push Bitcoin over $60,000 by 2020. David Sapper, the COO (Chief Operating Officer) of the Blockbid crypto exchange, added that not only does a rising hashrate indicate higher prices, but a long-term belief in this nascent industry. He explained:
“The increased hash rate means people are here for the long-term because they’re happy to just accumulate what they have, potentially even run at a loss. At the same time, At the same time, they do sometimes have to clear house and dump (though).”
Taking these statements into account, it becomes clear that although the short-term prospects for this market may look dismal, the never-ending increase of hashrates across the board is solid proof that many hold faith in Bitcoin, even in the roughest of waves.