Fundstrat analyst Sam Doctor believes that Bitcoin Core (BTC) hashpower has apparently doubled since the start of the summer. It is quite impressive to have such a figure, taking into consideration the lingering and deep bear market. “Even with upgrades to existing equipment, implies almost 1GW of new power consumption vs 5.2GW in May ’18m” Mr. Doctor tweeted. “Breakeven now $7,300 ($5,300 cash BE) vs. $6,000 in May.” According to a report from an exchange, miners might be accepting lower shorter term gains in favor of the market position.
The increase in the BTC difficulty and hashrate along with the indicators are considered as advantages for more robustness and resilience to the network. According to proponents, the fact that miners can still get along in a bear market, with enormous price drops and their own profits, is an indicator of better days ahead for all.
Bitmex, an exchange, has a theory about the recent occurrences in the market. According to them, powerhouse mining operations like Bitmain have welcomed market prices bottoming out, noting that it pushes out weaker hands and helps increase its relative position.
“These low prices are likely to be a deliberate strategy by Bitmain,” the exchange explained, “to squeeze out their competition by causing them to experience lower sales and therefore financial difficulties. In our view, herein lies the key to one of the main driving forces behind the decision to IPO. A successful IPO may increase the firepower available to continue this strategy and eliminate advantage rivals could have by doing their IPOs first.”
Since May, Bitcoin Core hashpower has doubled, and in the face of a brutal, near 70% price slide. According to media sourcing, that increase was claimed by Fundstrat: the favorite Wall Street investment firm of the cryptocurrency community.
If the amount of BTC hashpower drops, then its mining difficulty will be lowered, and vice versa. It then becomes more difficult for miners to find blocks when the difficulty rises, it means that miners will earn less. BTC rewards change about every four years, that means mining revenue is at the mercy of mining difficulty and its volatility.