It’s taken roughly one year for Bitcoin’s hashrate to look like the price action it’s taken from 2017 to 2018. Hashrate is done 50% from 60 exahashes to 30. In other words – Bitcoin hashrates are down. Finally, the charts for both mimic one another. Is this a dire sign that we should heed – is it a good thing or a bad thing – cryptocurrency hashrate down?
For some, no – some people are expecting the price to continue increasing! We know that ASICS are currently down – AMD and NVidia have released some not-so-great future predictions for their hardware.
But this brings up an important question – what does this mean for ASICS miners? From the graph and data available to us, this may simply be seen as miners waiting for the price to increase. As it stands right now, Bitcoin and other ASIC tokens are not profitable to mine – certainly not at the difficulty of 60 exahashes.
Ethereum, another popular cryptocurrency that’s mined, has seen a significant drop in hash – from 300 terahashes to about 180. Ethereum’s mining hash has remained stable throughout the year, even as the price has dropped.
The bear market we’ve experienced is starting to rear its teeth – roughly a year ago, we began to see all-time highs up until Christmas. The question now is – how long will this bear market continue?
The networks of these coins don’t care – hashrate fluctuations are considered into the difficulty adjustments that keep the networks running – even if only one person mining with an average CPU would be able to due to the difficulty adjustment.
Bitcoin has seen its second biggest downwards difficulty adjustment in its decade long story – from a drop of 18% in 2011 to its now 25% drop in 2018.
This has caused miners to no longer sell bitcoin or to expand their business via new hardware or hiring new employees. The big question now is – if supply might have or is decreasing due to the lower hashrate, will demand pick up?
We don’t know. Just as we didn’t know we were in the midst of a historic bull run for the cryptocurrency space in 2017 until November and December, we didn’t now we were in a technical bear market until a few months ago.
Of course we all knew things were bad in 2018 by March, when the go to statement was “next month, next month”. We witnessed support levels being thrashed, and we saw resistance smashed – we could dismiss these during a bear market and a bull market – when one dips, we could say this is just to be expected while a bull would say this is just a dip. It’s a matter of perspective.
Except now, we’re looking at hundreds and thousands of tokens doing a full retracement – investors are now left holding a bag of crypto with no direction in sight.
There’s an obvious course of action – sellers could choose not to sell, and demand would pick up their bags. But how do we know when that will happen? Will there still be interest? The opposite is true – we could sell the bottom, but if there’s no demand, there’s no one left to sell to! After all, you can’t really buy anything with say, EOS token right now, unless it’s a private to private sale with someone specifically looking for EOS.
What about the worst case scenario? If 1 Bitcoin is worth $0.00, you’d still have 1 Bitcoin. Is this likely? Probably not, but it’s still a possibility.
There’s a lot of room for either way – the bulls or the bears – for cryptocurrency to go. We just need to wait it out and see what happens. We’ve got a lot of great news coming in 2019. Bakkt is coming. Countries are adopting. Financial institutions are waiting with wanton anticipation to enter this space. Where will you be when the next bull run comes? Let us know on our Facebook page!