July 24, 2021

Bitcoin network’s computing power: Is it an accurate predictor of BTC price?

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Hash rate refers to the overall computing power involved in validating transactions on the Bitcoin (BTC) blockchain. As reported by Cointelegraph, more power suggests greater network security and interest in the profitability potential of mining Bitcoin.

Hash rate a function of Bitcoin’s value

A hash rate increase is often associated with the expectation of BTC price appreciation. Analysts found evidence that both the 2013 and 2016 bull cycles were marked by a rise in mining difficulty following the hash rate increase.

For instance, the 70% gains in 2021 coincided with multiple investments and large orders for mining equipment. But singling out cause and consequence is almost impossible.

A few examples include Argo Blockchain buying a 320-acre land pilot in Texas to expand operations, Bitfury’s U.S. mining subsidiary going public, and the BTC.com mining pool acquisition by a Chinese lottery service.

However, there have been periods of absolute dissonance, so maybe there is no direct relation between Bitcoin price and miners’ installed capacity.

Despite being impossible to measure precisely, the seven-day average hash rate yields better results Title: Bitcoin network’s computing power: Is it an accurate predictor of BTC price?
Sourced From: cointelegraph.com/news/bitcoin-network-s-computing-power-is-it-an-accurate-predictor-of-btc-price
Published Date: Sun, 21 Mar 2021 09:00:00 +0000