Bitcoin Hashrate Hits New All-Time High Again, Will The Price Follow?
With the Bitcoin price consolidating between $11,000 and $12,000 it’s encouraging the bears out who believe the price is set for a big correction.
While anything is possible in the short term, the Bitcoin hashrate seven-day average has just broken another all-time high, indicating the bears might have to wait a bit longer.
Bitcoin Hashrate Keeps Breaking All-Time Highs
According to data from Blockchain.com on August 15, the Bitcoin hashrate seven-day average broke through the previous high of 126.94 EH/s from July 29, and then yesterday it kept rising to a new high of 129.07 EH/s.
As we can see from the chart, since the expected crash after the halving, which saw the hashrate drop to a yearly low of 90 EH/s, the hashrate has risen emphatically, up almost 45% since the halving induced crash.
What Is The Bitcoin Hashrate?
The Bitcoin hashrate is a measurement of how much processing power is being used by the Bitcoin network at anytime by all the hundreds of thousands mining devices.
All mining rigs work collectively to help verify transactions, and solve the cryptographic puzzle that allows them to add the latest block onto the blockchain, something the winning miner is rewarded for with the block reward of 6.25 BTC.
The combined hashpower is a also an indication of the security of the Bitcoin network. This ensures Bitcoin is by far the most secure network ever created, and as the hashrate rises it means the Bitcoin network keeps getting even more secure.
Will The BTC Price Follow The Hashrate And Reach A New All-Time High?
While there isn’t a direct correlation between the Bitcoin network’s hashrate and the BTC price, many analysts believe a rising hashrate means a rise in price is inevitable.
This is because the increase in hashrate is either coming from new miners or at the very least more investment in mining equipment.
No doubt bigger companies think long term, and short-term mining profitability isn’t a concern for them, but a higher hashrate does suggest existing miners believe more profits are likely, and are, therefore, willing to invest more in mining equipment.
Another reason to believe the Bitcoin price will rise is the mining costs. All the new investment, and the price of mining is just about break even, depending on your costs.
And with profits falling and ultimately mining costs rising after the Bitcoin halving, means those who kept mining probably held onto their bitcoins instead of selling for a bigger loss.
This will have solidified and lifted Bitcoin’s price floor, so says the CFO of Boston Trading Co., Jeremy Britton:
‘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, it cost roughly $3000 just in electricity to mine a single bitcoin. This is why, when BTC crashed earlier in 2019, the price did not go below $3000; miners did not wish to sell for a loss.’
And with the halving now done, there’s a minimum $6000 cost just in electricity for a single Bitcoin, and that’s going by the cheapest electricity prices, so it’s fair to say the new HODL floor is $6,000.
All-Time Highs All Around?
All mining metrics are pointing north. With the seven-day hashrate reaching yet another all-time high, it’s certainly a bullish factor.
With all the new ASICs being released this year, the competition and investment in mining equipment is ramping up, and this shows no sign of easing.
The bears will always find bearish signals, and a correction could be on the cards, but everything is signalling a run up to test a new all-time high, possibly by Q4.
Author: Tommy Limpitlaw
How many bitcoins are there?
There can only ever be 21 million bitcoins. At the time of writing, there are 18,422,856 bitcoins in circulation. There are 6.25 bitcoins minted roughly every 10 minutes, so that’s 900 every day. The amount of newly minted bitcoins is cut in half roughly every 4 years, in what is known as the halvening. The halvening will continue to take place until the last fraction of Bitcoin is minted in around the year 2140.
How long does it take to mine one bitcoin?
On average, the time it takes for miners to mine BTC is 10 minutes. But they don’t just mine 1 BTC. Mined Bitcoins are created with every new block and these produce the Bitcoin block reward which at the moment is 6.25 BTC, so you could say it takes less than 2 minutes to mine each Bitcoin.
How much does it cost to mine one bitcoin?
There is no exact science for the cost of mining a bitcoin, because the price will change every two weeks maximum. This is because there’s a Difficulty Adjustment that ensures it takes about 10 minutes to mine a block. And with other costs, such as your mining equipment, electricity, and other costs, it’s estimated that the average price to mine a bitcoin is around $12,500.
How can I buy Bitcoin in Australia?
There are many reputable Bitcoin exchanges operating in Australia. However, the most recommended exchange is Kraken or CEX, or you can buy Bitcoin from Bitcoin marketplace, Paxful. All of these exchanges and marketplaces are global with high liquidity and excellent customer service. Feel free to read the reviews of each one.
A Bitcoiner since 2017 and a Bitcoin Maximalist since 2018, Tommy is our main writer and editor at Bitcoin Maximalist. Other than researching and writing about Bitcoin, Tommy loves spending time with his family and supporting his beloved Leeds United.