This explosion in price could happen due to crypto mining, as Fundstrat predicts a growth of 350% in hash power (the processing power of the Bitcoin network) through 2019. Sam Doctor, head of data science research at Fundstrat, said in a report that the current path of hash power growth supports the forecast.
Source: Fundstrat. P/BE - the Bitcoin Price to Mining Breakeven Cost metric.
According to CNBC, during a conference call, Doctor said that the economics of Bitcoin mining likely create a support level for the cryptocurrency, as Bitcoin miners are more likely to hold as the price falls to make up for operating costs, so they sell when the price rises for greater profits: “The primary net sellers, in our view, are bitcoin miners, and the rest are transactions between investors.”
“The release of the next generation of rig hardware should trigger a new round of capex [capital expenditure] as well as hash power growth, which could accelerate if BTC price appreciates,” Doctor said.
Meanwhile, American technology company Nvidia revealed for the first time how much revenue it generated from sales to miners, and said it expects much smaller figures in the second quarter. According to Bloomberg, Nvidia shares declined as much as 3.8% in extended trading after its earnings were announced. The company adds that crypto miners bought most of their GPUs (Graphics Processing Units), which drove prices up, in turn causing gamers to miss out on the new GeForce GPU.