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10/09/2023
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1. Bitcoin Hashrate Hits Another ATH As Miners Continue to Back BTC
Bitcoin 7-Day Hashrate Hits New ATH Despite Struggling Price
The “mining hashrate” is an indicator that keeps track of the total amount of computing power that the miners have currently connected to the Bitcoin blockchain.
This metric can have a direct impact on the strength of the network’s security. This is because the more mining rigs are attached to the chain, the more difficult it is to perform a 51% attack.
This is only given, of course, that the hashrate is sufficiently decentralized. With the rise of large public miners, there have been concerns that the hashrate is increasingly becoming centralized, but the latest data has revealed that these public entities control just 28% of the global hashrate, which isn’t an alarming figure, at least not yet.
When the value of the hashrate goes up, it means that the miners are bringing more machines online on the network right now. Such a trend implies that these chain validators are finding the blockchain attractive currently.
On the other hand, the indicator going down suggests some of the miners are disconnecting from the chain, likely because they are finding the coin unprofitable to mine at the moment.
As shown in the above graph, the 7-day average Bitcoin mining hashrate has been steadily climbing up since January. During the first half of the year or so, BTC had enjoyed some sharp upward momentum, which may explain why the miners were willing to expand their facilities.
The revenues of these chain validators as a whole depend mainly on the price of the cryptocurrency, as the block rewards that they receive have a fixed value in BTC; it’s only their USD value that’s variable.
Thus, it’s often not surprising to see the hashrate shoot up in bullish periods, as the miners look to capitalize on the boosted revenues. In recent weeks, though, the coin has, in fact, been struggling, but these chain validators have nonetheless continued to connect more power to the network.
The indicator has been continuing to set new all-time highs in this period of growth, the latest of which was achieved just a couple of days ago. The individual revenue that a miner may earn doesn’t just depend on the BTC price, but also on the competition present among these chain validators.
The Bitcoin mining hashrate is essentially a representation of this competition, so the higher its value, the lesser the share of the rewards that each miner gets.
So, it would seem that despite the competition reaching an all-time high and the price registering a steep decline, these miners have remained resolute about the asset, as they have only continued to invest more into their mining facilities.
2. Difference in Bull and Bear Crypto Market Gains Is Negligible, Say Analysts
The adage that time in the market beats timing the market is more relevant than ever.
According to an analysis by crypto research company Ecoinometrics, the difference in monthly returns between bulls and bears is negligent–meaning you’re better off placing your bets on Bitcoin and Ethereum whenever it works best for you.
Bitcoin and Ethereum have been quite similar in their price performances over the years. Both assets disregard whether they are in upbeat or downturned markets, with the exception of Ethereum’s first bull market back after its launch in 2015.
For Nick, the founder of Ecoinometrics, timing the market is a fool’s errand. He told Decrypt, “there is way too much uncertainty in financial markets to do that.” pointing out adjusting your investing strategy due to market conditions “does make sense.”
At Ecoinometrics they call their investing “tactical,” and point to two approaches when thinking of buying: long term macro cycles and market liquidity conditions.
The toil in timing the market ultimately boils down to time frames, said William Cai, co-partner of financial services company Wilshire Phoenix.
“Market timing historically has shown to be difficult to earn consistent outperformance, especially in the long term,” Cai told Decrypt. Given the fact that crypto assets are still new, he considers “a long term view and investment horizon is appropriate.”
In other words, simply be patient. Cai’s perspectives latch on to many other successful investors who have lambasted those who tried to pick the exact moment to buy or sell an asset. Instead, they point to a consistent and recurring investment approach known as dollar cost averaging (DCA) is the winner.
Oliver Veliz, a professional trader with more than 37 years in the trade, told Decrypt that he has been dollar cost averaging in traditional markets since 1981 and has “never stopped.” For BItcoin, this has been his go-to strategy since 2020.
By removing price concerns, “establishing order in one’s approach to accumulation and most importantly eliminating volatility,” the strategy becomes “magic,” he concluded.
3. Bitcoin Miner Iris Energy to Increase Mining Capacity by 25%
Bitcoin mining company Iris Energy has declared plans to step up its mining capacity. Through a partnership with the Bitcoin mining hardware manufacturing company Bitmain, Iris Energy announced that it would be increasing its self-mining capacity from 5.6 exahashes per second (EH/s) to 7 EH/s, representing a 25% increase.
Iris Energy to Step Up Mining Capacity
The Bitcoin mining company revealed that the new mining capacity will be achieved through the acquisition of 7,000 units of Bitmain S21 mining machine, which will be purchased at $19.6 million. An initial $16.7 million will be deposited before shipping. The remaining $2.9 million, representing 15%, can be postponed until a year after shipment.
Funds from Iris Energy’s existing capital, including its $64 million cash in the bank, operating cash flow and other funding programs.
The shipment, scheduled for early 2024, will see the mining machine transported to and installed at Iris Energy’s Childress mining facility in Texas, United States.
Iris Energy adds that it “continues to monitor the market for additional hardware acquisition opportunities.”
Other Bitcoin Mining Firms Expand Businesses
Like Iris Energy, other Bitcoin mining companies are taking a similar turn to grow their businesses. In June, two Bitcoin mining firms – Hut 8 and U.S. Bitcoin Corp – signed an all-stock merger deal, enabling both companies to establish a new mining company under a new name, New Hut.
The new company’s market capitalization is expected to boost to $990 million across six mining facilities.
Last year, the Bitcoin mining business saw a global struggle as Bitcoin’s price plunged below the $20,000 price mark and the cost of electricity tariffs soared. Bitcoin miners like Core Scientific even went bankrupt.
However, Bitcoin mining companies began to recover from the lows as Bitcoin’s price began increasing. In April, the stocks of major Bitcoin mining companies outperformed BTC on a year-to-date (YTD) scale.
Meanwhile, Bitcoin’s price currently trades above $27,900, representing an impressively 40% increase over the past year.
