Bitcoin has been struggling to climb over $12k for weeks. Could an increased hash rate indicate a higher price?
The price of Bitcoin has been struggling to mount the $12,000 resistance level for roughly three weeks since it surpassed $10,000 on July 27th. However, as pressure below the $12,000 level has continued to build, its seven-day average Hash Rate has reached a new all-time high.
Indeed, citing data from Blockchian.com, CoinTelegraph reported that as of August 15th, Bitcoin’s seven-day average hash rate hit 129.075 TeraHash/second (TH/s). The previous all-time high of 126.91 TH/s was reached on July 29th.
A Rising Hash Rate Could Indicate a Coming Rise in the Price of BTC
Hash rate is a measurement of how much computing power is being used on a Blockchain at any given time. While there isn’t a direct correlation between a network’s hash rate and the price of its cryptocurrency, some analysts believe that a rising hash rate is indicative of a rising price to come.
This is because an increase in hash rate may signify an influx of new miners, or at least, more mining equipment onto the Bitcoin network, presumably because miners believe that they can make a profit.
A higher hash rate could also suggest that existing miners have more faith in an asset’s profitability. In other words, the entities that are spending money and resources to put the hash power into the network believe that their endeavors will be profitable, and therefore, they will continue to spend.
For example, earlier this year, Jeremy Britton, the chief financial officer at Boston Trading Co., explained to Finance Magnates that increased mining costs on the Bitcoin network mean that miners will hold onto their coins until higher price levels are reached, increasing the Bitcoin price 'floor'.
“As with mining any scarce resource (e.g. silver or gold), if mining becomes more difficult or more expensive, the price of the underlying asset will increase,” he said.
Before May’s halving, Britton explained that it costs roughly $3,000 “just in electricity to mine a single bitcoin (notwithstanding the cost of hardware, and internet access). This is why, when BTC ‘crashed’ earlier in 2019, the price did not go below $3,000; miners did not wish to sell for a loss.”
Now that the halving has taken place, however, “the price to mine a single bitcoin [has increased] to a minimum of $6,000. Whatever the new ceiling is, the floor will be $6,000, as miners will refuse to sell for a loss.”
The price of Bitcoin has been struggling to mount the $12,000 resistance level for roughly three weeks since it surpassed $10,000 on July 27th. However, as pressure below the $12,000 level has continued to build, its seven-day average Hash Rate has reached a new all-time high.
Indeed, citing data from Blockchian.com, CoinTelegraph reported that as of August 15th, Bitcoin’s seven-day average hash rate hit 129.075 TeraHash/second (TH/s). The previous all-time high of 126.91 TH/s was reached on July 29th.
A Rising Hash Rate Could Indicate a Coming Rise in the Price of BTC
Hash rate is a measurement of how much computing power is being used on a Blockchain at any given time. While there isn’t a direct correlation between a network’s hash rate and the price of its cryptocurrency, some analysts believe that a rising hash rate is indicative of a rising price to come.
This is because an increase in hash rate may signify an influx of new miners, or at least, more mining equipment onto the Bitcoin network, presumably because miners believe that they can make a profit.
A higher hash rate could also suggest that existing miners have more faith in an asset’s profitability. In other words, the entities that are spending money and resources to put the hash power into the network believe that their endeavors will be profitable, and therefore, they will continue to spend.
For example, earlier this year, Jeremy Britton, the chief financial officer at Boston Trading Co., explained to Finance Magnates that increased mining costs on the Bitcoin network mean that miners will hold onto their coins until higher price levels are reached, increasing the Bitcoin price 'floor'.
“As with mining any scarce resource (e.g. silver or gold), if mining becomes more difficult or more expensive, the price of the underlying asset will increase,” he said.
Before May’s halving, Britton explained that it costs roughly $3,000 “just in electricity to mine a single bitcoin (notwithstanding the cost of hardware, and internet access). This is why, when BTC ‘crashed’ earlier in 2019, the price did not go below $3,000; miners did not wish to sell for a loss.”
Now that the halving has taken place, however, “the price to mine a single bitcoin [has increased] to a minimum of $6,000. Whatever the new ceiling is, the floor will be $6,000, as miners will refuse to sell for a loss.”
Rachel is a self-taught crypto geek and a passionate writer. She believes in the power that the written word has to educate, connect and empower individuals to make positive and powerful financial choices. She is the Podcast Host and a Cryptocurrency Editor at Finance Magnates.
Bitget's Bitcoin Reserve Ratio Soars Over 300% Following Halving
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
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#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
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#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
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Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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