9/10 ANDY HOFFMAN (CryptoGoldCentral.com): Bitcoin’s Hash Rate, Each Time Price Has Been $10,000
With Bitcoin’s hash rate breaking out to a new all-time high last week – after consolidating at its previous all-time high throughout August – many are wondering why the price doesn’t break out, too. This, during what is obviously a BTC bull market – having bottomed in December, and since risen nearly fivefold.
https://bitinfocharts.com/comparison/bitcoin-hashrate.html#1y
The primary reason is there is no SHORT-TERM correlation between price and hash rate – just a LONG-TERM one that is powerful, but only recognized in hindsight. That, and the fact that unlike any asset I have seen – which let’s face it, is still “emerging” after just ten years of existence – Bitcoin moves to the “beat of its own drummer.” In other words, aside from extremely dramatic events, it tends to surge and plunge – both in the short and long terms – when it feels like it…often, extremely enigmatically.
Today, I believe the “new Hoffman Line” of $10,000 is acting like a powerful psychological magnet – even though the value it represents, about a $180 billion market cap, does not have much technical or psychological importance, in and of itself.
In my view, $10,000 has become the platform to consolidate the Spring’s huge move from $4,000 to a high of nearly $14,000 – like all previous consolidation points, a much “higher low” than the last. To wit, after the 2013-14 bubble, the price consolidated at $300 – and after the 2017-18, the “first Hoffman Line” of $6,000.
So you can see how short-term price movement is uncorrelated with price changes; as well, the long-term progress Bitcoin has made – here is where the BTC hash rate has been each time the price traded at $10,000 over the past two years.
November 2017 11E hash/s
January 2018 20E hash/s
May 2018 30E hash/s
June 2019 55E hash/s
September 2019 90E hash/s
Fundamentally, Bitcoin has never been stronger – as demonstrated by the fact the hash rate has surged nearly 65% SINCE the price recaptured $10,000 less than three months ago.
Given what’s going on in the fiat monetary realm – i.e., record debt, money printing, and currency debasement; as well as increased “institutionalization” - in the form of Bakkt Futures, the VanEck/SolidX “partial ETF”; and generally speaking, a growing realization that Bitcoin is here to stay, offering a real solution to real problems; the odds appear strong that the massive “wedge pattern” formed since the June breakout – which appears close to resolution – will yield a new breakout this Fall.
Nothing is certain in financial markets, of course – especially in Bitcoin. But what IS certain, is that its use case – as a premier store-of-value asset, at a time a monetary world gone mad needs it most – has never been more useful. And at just a $180 billion market cap, its value pales in comparison to the archaic legacy asset currently being (mis)used for this role.