Despite the steady decline in Bitcoin prices, the network hashrate continues to increase astronomically. Why are miners contributing more computing power to mine a cryptocurrency that has struggled over the past five months? Market analyst, Naeem Aslam believes the trend implies an upcoming price increase.
Bitcoin Fundamentals and Market Indices at Odds with Each Other
From an economic perspective, it makes no sense for miners to spend more money mining Bitcoins when the price continues to struggle.
A recent report by Morgan Stanley revealed that $8,600 is the breakeven price for bitcoin mining. In 2018, Bitcoin has struggled to stay above that price mark. However, network hashrate continues to rise even higher despite the fact that the market has lost half of its value since December 2017.
The charts above show price movement and hashrate growth over the last year. Particularly interesting is that the mining hashrate steadily increases around the same time of the market correction when bitcoin lost half of its market capitalization. Odd isn’t it?
To have that type of divergence unless as Aslam believes, it is proof that miners have full confidence in the crypto. Thus, they are willing to ignore the market indices by contributing more …
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