Bitcoin Hashrate Rising Again
The Bitcoin hashrate is rising again after dropping 45% to a local low of 98 EH/s on 27 October. The crash didn’t affect the Bitcoin price, however, as the correlation between the two reversed.
It appears to just be a temporary misalignment, however, and investors should be watching the rising Bitcoin hashrate with bullish sentiments, yet again.
Since the drop under 100 EH/s, the rise has steadily climbed and is now starting to gain pace. At time of writing the Bitcoin hahsrate sits at 124.3 EH/s.
After an all time high of 153 EH/s on 13 October, the Bitcoin hashrate collapsed over 45% to the local lows of 98 EH/s, which was blamed on the end of the rainy season in China.
This was noted by prominent Bitcoiner, Jameson Lopp, who believes we will see this trend dissipate along with China’s hashrate dominance.
A Rise In Hashrate Could Signal a Rise in Bitcoin Price
The drop in hashrate never led to any doubt about the security of Bitcoin network. And if anything the plunge will benefit miners, as the difficulty adjustment will ensure cheaper mining costs for the following 2016 blocks.
And with the Bitcoin price remaining above the average Bitcoin mining cost of about $12,500, it’s a signal that the people left in the market are either knowledgable and hodling.
The 27% hashrate climb since the drop under 100 EH/s has been impressive. And as Chinese miners continue to switch back on, it will likely lead to higher hashrate highs, and who would bet against the Bitcoin price following the trend?
China Dominates The Bitcoin Hashrate, For Now
At over 65% of the Bitcoin hashrate coming from China, any trends from there will have a significant effect on the hashrate.
But this dominance is abating, as more Bitcoin mining firms set up in the US, Russia, Kazakhstan and Iran.
The US powers 7.24% of the Bitcoin hashrate, whereas Russia 6.9%, Kazakhstan 6.17%, and Iran powers 3.82 of the Bitcoin hashrate.
They’re all a long way from 65%, but they are eating away at China’s hashrate dominance.
Most notably the US has been capturing many large deals as mining firms look to set up in more stable jurisdictions.
Last week, BitcoinMaximalist reported on US public mining firm Marathon Patent Group Plc. announcing another huge purchase of Antminer S19 Pros from Bitmain.
Once Marathon have all the new S19s installed, they claim to have a hashrate of 2.56 EH/s, giving it more than 2% of the total hahsrate at today’s rate.
And that’s just once US company. There have been many other big news stories in the past few months as the US tries to entice Bitcoin hashrate away from China.
Bitcoin Friendly Iran Could Be First State To Announce Bitcoin Holdings
Iran has also opened up to Bitcoin mining, as the government looks to possibly build its BTC coffers. The Iranian government has been clamping down on independent “illegal” miners, while at the same time funding huge mining farm development.
And according to Iranian News Agency (ISNA), the government has established new regulations for Bitcoin miners. It’s believed the government is trying to secure BTC from its miners.
According to the report, the Ministry of Energy and Central Bank of Iran (CBI), requires the country’s legally registered cryptocurrency miners to sell the tokens they mine to CBI.
Iran is increasing its pro Bitcoin and mining stance as it looks for ways to trade globally. Not only is it looking to evade the crippling US sanctions, but many believe Iran will be the first state to announce it has Bitcoin as part of its treasury. We wait with baited breath.
The Bitcoin Hashrate Is Just Like The Bitcoin Price
The critiques of Bitcoin were out in force on Crypto Twitter last week as the hahsrate crashed. But the security of the Bitcoin network was never under threat.
The Bitcoin network is by far the most powerful and secure network ever created, and drops like this are just par for the course.
It happens every year, but as Jameson Lopp says, it will dissipate as the hashrate drifts away from China.
The Bitcoin hashrate is volatile, just like the Bitcoin price. If you stand back and look at the macro trend, however, it’s pretty clear which way both the hashrate and price are heading.
Author: Tommy Limpitlaw
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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.