TL; DR
-
Typically, when the Bitcoin hash rate bottoms out, so does the price of BTC – and right now it looks like the Bitcoin hash rate has bottomed out.
Full story
There’s tea leaves, there’s astrology, and then there’s the Bitcoin hash rate.
None of them are a perfect indicator of the future, but some believe they are pretty close.
We don’t know much about tea leaves or astrology, but here’s what the Bitcoin hash rate is:
The hash rate is a measure of the total computing power used by Bitcoin miners to process transactions and secure the network.
(Which by extension indicates how easy or difficult it is to mine BTC).
Straight away, The total hash rate of Bitcoin has fallen to 556 exahashes per second (EH/s), compared to 658 EH/s at the end of May.
As a result, the Bitcoin network automatically reduced the difficulty of block mining by 7.8%.
What does this all mean?
Basically, usually when Bitcoin’s hash rate bottoms out, so does BTC’s price.
Long story longer: if the price of BTC increases, the transaction costs will also increase. As transaction fees rise, mining becomes more profitable, motivating miners to contribute more computing power, increasing Bitcoin’s hash rate.
Is a hash rate bottom a perfect indicator that the price of BTC is about to rise?
Absolutely not!
But we certainly hope that everything will get going again.
