— Max Keiser (@maxkeiser) July 13, 2020
And the Keiser Report presenter said that the actual price wasn’t the main thing, but that the increase in hashrate ‘shows confidence USD collapsing,’ explaining how Bitcoin would be extracting energy from fiat.
Seriously-joking, Keiser went on to say the USD was held together with ‘trillions of dollars worth of sticky tape and rubber bands.’
And because the US government was doing nothing to halt the rise of the Bitcoin hashrate, it is a clear sign to the long-time Bitcoin bull that Washington was ‘doing nothing to stop a hyperinflationary collapse of the USD.’
Bold words as ever from Keiser, but his beliefs are backed up by digital asset manager, Charles Edwards’ ‘Energy-Value’ model for Bitcoin’s value.
In a research report titled Bitcoin Energy-Value Equivalence, Edwards says Bitcoin’s value should be measured as ‘a function of its energy input in Joules.’
The Energy-Value formula states that every piece of energy input should increase the value of Bitcoin, and vice versa for any decrease in energy.
And we can see in the image below that the energy value of Bitcoin has closely monitored the actual price.
Back in December 2019, when the report was carried out, the price of Bitcoin was about 50% under the fair Energy-Value of around $11,500.
Therefore, with the hashrate about 30% higher than the December hashrate, we can estimate a price of about $15,000, according to the Energy-Value model.
With the expected miner capitulation immediately after the Bitcoin halving not really gaining any momentum, we ask what’s behind the surge in Bitcoin’s hashrate?
Well the mining industry is becoming ever more competitive as the race for more powerful mining rigs intensifies.
Added with investment in the mining space by huge investment firms like Fidelity, the race to higher hashrates seems like it’s only just beginning.
Bitmain released its most powerful ASICs rig last quarter. The Antminer S19 Pro is leading the hashrate now with up to 110 TH/s.
Not to be outdone, however, MicroBT is about to release its new Whatsminer M30S++ which has a top hashrate of 112 TH/s.
Both mining manufacturers are said to be inundated with orders and simply can’t make enough to meet demand. Therefore, all this new hashhrate and investment is pumping the Bitcoin hahsrate to higher highs, which will likely be dwarfed this time next year.
The Bitcoin hashrate is at a new all time high. It’s doubled since this time last year, and up over 1000% since the Bitcoin price was at an all time high.
There is billions of dollars being invested in the Bitcoin mining industry by investment giants such as Fidelity, as everyone clamours to turn their energy into Bitcoin.
Bitcoin and Bitcoin mining might be over 11 years old, and the value and rates in the price and hashrate are incredible, but I believe it’s only just the beginning of this exciting journey.
Author: Tommy Limpitlaw
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.
