It seems like we’re in a constant state of flux about BTC. While some people are predicting a return to $20,000 (or more), other investors are hoping for a continued bear market that might allow them to buy more cryptocurrency at lower prices. In either case, it’s safe to say that everything is happening at lightning speed in the crypto space and it’s difficult for anyone to keep track of all the news as it unfolds each day. This article will explore some of these changes in detail—specifically focusing on mining profits and hashrate—so you can better understand how they relate to each other.
After a relatively uneventful first half of August, Bitcoin’s (BTC) price finally began to consolidate just below the $12,000 mark.
The move lower was driven by a significant drop in the price of bitcoin cash (BCH), which fell from above $400 to as low as $300 during that time period. The cryptocurrency has since recovered some ground but still remains below its previous year high at around $440.
BTC Hash Rate Goes High
Bitcoin miners may be able to keep profitability levels high if they are able to maintain their current hash rate levels and keep electricity costs down. However, there is some concern that future declines in mining profitability could drive miners out of business and reduce BTC’s hashrate – which would make it harder for BTC holders to mine new coins or create transactions on its network.
Given that most other major cryptocurrencies had already broken out well above their early August ranges, it could be said that BTC also delivered something of a breakout.
The last time Bitcoin was trading this low was in November 2018, when it fell to roughly $3200 after hitting an intra-day high at $11,400 just days before. In terms of percentage decline since then, this is one of the worst falls since then for Bitcoin – but similar declines have been seen before and were followed by strong rebounds. For example in 2015 we saw a drop from around $400 to $250 followed by a recovery back up over $500 within weeks.
