Last night, on the eve of the one-year anniversary of Bitcoin’s price peak, I tweeted that it appeared like it’s hash rate was amidst a potentially significant bottoming formation. No guarantees, of course - but in my view, ALL that matters in Bitcoin right now is the perception of whether it’s Hash Rate will continue to decline, or bottom and move back up.
https://twitter.com/Andy_Hoffman_CG/status/1074457583702790144
- Andy_Hoffman_CG
In fact, I have maintained this all year – going back to this summer, well before the SV-catalyzed SHA256 “Hash War” caused Bitcoin’s at the time, record-high hash rate to plunge nearly 50% in barely a month.
Part of the reason it’s declining is due to the lagging effect of mining investments that take time to be reversed, given their high capital intensity. That is, just as Hash Rate continued to surge long after the price peaked – with HR peaking last month, nearly 11 months after price; it’s likely the hash rate will remain stagnant for some time, even if a new bull market commences.
That issue aside, those who claim hash rate and price are not tied at the hip have not a clue what drives crypto. Per the issue above, Bitcoin’s hash rate may not have in fact declined – but if it has, I ASSURE you price has, too. And even if it doesn’t, consider that the current hash rate is still, after having fallen 45%, nearly twice what it was a year ago.
https://twitter.com/Andy_Hoffman_CG/status/1074505755271692289
- Andy_Hoffman_CG
Either way, Bitcoin “aint’ goin’ nowhere – as unquestionably, it is the most important, and positively disruptive technology since the internet itself. Thus, if it hasn’t bottomed yet, it shouldn’t be long now.