Bitcoin: Its Computational Power Increases Faster Than Its Price

Since last year, the hash rate of bitcoin (the computing power used by the bitcoin network to mine) has skyrocketed, trying to catch up with the price of virtual currency.

The surge in the value of bitcoin, which rose from around $ 1,000 in early 2017 to almost $ 20,000 in December, caused a wave of new miners to add their computing power to the bitcoin network. However, despite falling prices in 2018, the hash rate has continued to increase, and has more than doubled in the last four months after CoinJournal. Bitcoin lost a third of its value over the same period.

The hash rate of the bitcoin network has skyrocketed in recent months - BLOCKCHAIN.INFO

Although it takes time for the miners to add their computing power to the network after a price increase, the bitcoin hash rate does not decrease after a drop: it seems that the miners are not easily rejected. While the price curve has remained on the downward slope in recent months, a continuously increasing hash rate is heralding good news for the value of bitcoin in the long run.

This week, bullish investors shared optimistic outlooks on the price of bitcoin. Thomas Lee, head of Fundstrat's global advisors, said in an interview for Bloomberg that bitcoin is expected to hit $ 25,000, nearly a 270 percent increase from current levels.

This prediction rests on the fact that the value of bitcoin has historically represented 2.5 times the price of its mining cost, which according to Lee should reach 9000 dollars at the end of the year.

Others base their hopes on the functionality of bitcoin. Bart Smith, head of digital assets at Susquehanna International Group, told CNBC that "if you want to own an asset that really serves and you can actually use today, then the answer is bitcoin." Julian Hosp, president and co-founder of TenX (a cryptocurrency wallet and debit card) told CNBC that the value of bitcoin could potentially reach $ 60,000, although it is currently about 67% below its December peak.

According to Hosp, "If we touch the $ 10,000 end of August, we can see the 20,000, and the press and media will get involved, and we can expect to reach $ 60,000 in the year. I predicted that in 2018 we would see both values ​​of 5,000 and values ​​of 60,000. We are practically at 5,000, let's see if we can go back to 60,000. Personally, I feel confident. "

However, not everyone agrees with these assumptions. Earlier this week, Nobel economist Joseph Stiglitz announced that cryptocurrencies would soon be "crushed by regulation" and that bitcoin could be "worth only $ 100 in 10 years" because of crackdowns money laundering.

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