Bitcoin Hashrate Flying High, Bitcoin Dominance Up, What’s Next For Crypto?
Whilst the markets continue to look bleak, we should find some solace in the fact that Bitcoin dominance is flying high and so is the Bitcoin hashrate. Okay, these arenât signs that a bull run is about to take off, however, they are very positive signs nonetheless.
At the time of writing, Bitcoin is valued at $6,286.53, down 3.07%.
Bitcoin dominance currently sits at 56.4%, nearing the 59% - 65% dominance rate seen during December and January, when a Bitcoin surge up to $20,000.00 pulled up the value of the markets significantly. Does this mean a similar charge is imminent? Or is Bitcoin dominance simply just going to continue rising?
We canât be too sure just yet how significant this climb is. Indeed, if history is anything to go by then a push from Bitcoin will have a big impact on the markets, which in turn could lead to the second coming of Bitcoin, exceeding prices of $20,000.00, however this is not something we can guarantee. Actually, what could happen is Bitcoin dominance could simply just continue to rise, reaching 90% as it once did when the markets where a little less versatile than they are at present.
Why is a hashrate soar significant?
The soar in the hashrate of Bitcoin proves that miners are still interested in Bitcoin. Even with decreasing values, depleting profits and rising mining costs, itâs clear that miners are still digging for Bitcoin (so to speak). To give you a better perspective of this, according to Cryptovest, Sam Doctor, a quantitative researcher from Fundstrat Advisors has reported that since May, the Bitcoin hashrate has almost doubled, shooting up from 28EH/s to 57EH/s.
According to Cryptovest:
âDoctorâs analysis also showed that the break-even cost of mining one BTC is now $7,300 compared to $6,000 in May. This calculation includes the depreciation costs of mining equipment and suggests the âfair priceâ of Bitcoin. Given this information, the cost of mining one BTC is roughly 12% higher than the coinâs current price of around $6,300.â
âThe high hashrate is a positive indicator, as it means that the cryptocurrency blockchain network is stronger and more resilient to attacks. The increased mining difficulty, especially amid bearish crypto market sentiment, also indicates the minersâ belief that BTC will appreciate in the future. However, it is hard to estimate whether miners are selling immediately to cover costs, or stockpiling coins.â
Itâs evident that those who are mining Bitcoin do believe that Bitcoin still has a very prosperous future ahead of it. They believe Bitcoin will surge again and as a result of this, continue to mine and improve the network. Increased security and a stronger network means for safer investments which in turn will encourage new investors and may even allow us to see institutional interest. Institutional interest being the key needed to unlock the next level for Bitcoin, both in terms of price and in terms of its âadoptabilityâ.