Bitcoin Hashpower Has Doubled Since May, Says Fundstrat

In a rather positive news coming in from a Wall Street based investment firm, Fundstrat, it is apparent that Bitcoin’s hashpower has almost doubled since May.

Sam Doctor at Fundtsrat tweeted the following,

Despite $BTC bear market, hashpower doubled since May to 57 EH/s – Even with upgrades to existing equipment, implies almost 1GW of new power consumption vs 5.2GW in May '18. Breakeven now $7300 ($5300 cash BE) vs. $6000 in May – Mining becoming FCF -ive @fundstrat #Crypto pic.twitter.com/pTTWJWlrz0

— Sam Doctor (@fundstratQuant) September 14, 2018

The cryptocurrency market has not been quite fortunate in the recent times. It has seen an overall slump phase since February. The market valuation has fallen by more than 80 percent. Despite that, the market has witnessed a great rise in mining activity.

For those that do not understand the intricacies of crypto mining, here is a layman’s explanantion. If more people are mining a certain crypto, then it becomes increasingly difficult to mine that crypto and if less people are mining it, that makes the process all the more convenient. This is because when more people mine it, the hashrate of the network increases, which makes it difficult to mine.

The more difficult it is, the harder it is to find the blocks, and this leads to a decline in revenue for miners. So when the price of BTC falls, the revenue of miners fall too.

According to Fundstrat, in the last five months, the hashrate of Bitcoin doubled, despite a 70 percent drop in its price.

BitMEX had earlier conducted a research which revealed that Bitmain, has been keeping its profit margin at a constant low level and strengthening its stronghold over the market.

The research paper read:

“These low prices are likely to be a deliberate strategy by Bitmain, 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 an advantage rivals could have by doing their IPOs first.”