Bitcoin Hashrate has Doubled Since May Despite Price Correction: Fundstrat
Wall Street crypto research and investment firm has reported that the Bitcoin hashrate has doubled since May, from 28 EH/s to approximately 57 EH/s despite the significant drop in Bitcoin prices.
Wall Street crypto research and investment firm has reported that the Bitcoin hashrate has doubled since May, from 28 quadrillion hashes per second (EH/s) to approximately 57 EH/s. This increase in hashrate comes despite the Bitcoin price down since the start of the year.
Bitcoin mining cost rises
The cryptocurrency market has endured a torrid year, with cryptocurrencies losing more than 50 percent of their value. The drop in the value of Bitcoin and other cryptocurrencies have not stopped miners from increasing their investments over the past few months.
Sam Doctor, Fundstrat Global Advisor’s quantitative strategist and analyst in his tweet that the rising mining cost means that $7,300 is the breakeven mining cost which has risen compared to $6,000 back in May.
This means that when the power consumption, cost of ASICs and others are calculated, mining cost stands at $7,300. With this figure, it implies that mining Bitcoin at its current price is a loss for miners.
Doctor’s claims were supported by Thomas Lee, Fundstrat’s head of research. He retweeted Doctor’s tweet, stating that:
Updated estimates of fully loaded breakeven cost (now $7300 vs $6000 previously) for #btc based on the quant model developed by our quant/data scientist @fundstratQuant #bitcoin @BITMAINtech
Tom Lee has been one of the most popular names in the crypto world due to his bullish outlook on Bitcoin. He continues to predict that the leading cryptocurrency will record a new all-time high this year.
There is a belief that the breakeven mining cost has been some sort of support for the Bitcoin price. This latest analysis means that the bottom is at $7,300 and the Bitcoin price has dropped below the supposed bottom.
Mining Bitcoin is less expensive than Gold
There have been raging debates about the electricity consumed globally just to mine Bitcoin and other cryptocurrencies. A recent study conducted by Long Hash revealed that Bitcoin mining is far less energy intensive than mining gold.
The research looked in-depth into the energy consumption in mining Bitcoin and mining Gold. It revealed that the energy costs of worldwide oil consumption to mine Bitcoin and gold are 0.07% VS 0.27% respectively.
Large mining firms continue to expand operations
The increase in Bitcoin mining hashrate is due to more mining firms expanding their mining operations while some new companies are coming into the industry.
The increase in mining operations by rigs has covered up for the lack of interest from individual miners who have been leaving the sector due to lack of profitability. Despite profitability dropping, the mining firms are more than happy to continue mining.
The increased hashrate is an indication that people are into Bitcoin and other cryptos for long-term. They are accumulating because they know the potential that Bitcoin has despite its current slump.