TL; DR Breakdown
- Bitcoin hash rate is recovering fast
- The bulls are back from a quick retreat
- BTC price and hash rate don’t correlate
Bitcoin has been in the news of late following the short-lived price crash. The crash brought the top coin’s price down to the $40k range before the bulls re-charged to take it back up to the usual $50k range. Since then, the coin has been swinging between $48k and a little over $50k. The crash brought some other issues, the most notable of which was the significant fall in BTC’s network hash rate. Basically, that’s to say that the processing power of the Bitcoin network was adversely affected.
Now that the price is back up, there seems to be a positive impact on the hash rate. According to a report by Glassnode, BTC’s hash rate is on its recovery path back to its previous high level. At the time of the report, the hash rate was only 4% away from reclaiming the earlier ATH of 180 EH/s. It was recorded at 172 EH/s (exahashes per second). This posts an over 90% recovery. The ATH in question was reached back in May.
However, it’s worth noting that at the time, much of the network’s hash rate was contributed by Chinese miners who accounted for over 65%. Things have changed since then.
China is out of the game
In May, the Chinese government launched a crackdown against miners, causing many of them to go out of business. Others relocated their mining operations to other countries like the US and Kazakhstan. As a result of the shock, the BTC network hash rate fell by a whole 50%, putting a strain on both the price and the market atmosphere. As of now, China no longer contributes to the overall hash rate of the Bitcoin network.
Bitcoin price vs hash rate
The market price of Bitcoin and the network hash power have been proven to be independent factors that don’t correlate in any way. The hash power is dictated by mining activity, while the price is affected by market forces and community dynamics. At the moment, Bitcoin trades at around $50,489, with a total market cap of $956 billion and a market dominance of 40%.