Sam Doctor observation reveals that the figure of Bitcoin seems to be impressive with respect to the deep bear market. Mr. Doctor posted a tweet on September 14, saying:
Despite $BTC bear market, hashpower doubled since May to 57 EH/s – Even with upgrades to existing equipment, implies almost 1GW of new power consumption vs 5.2GW in May '18. Breakeven now $7300 ($5300 cash BE) vs. $6000 in May – Mining becoming FCF -ive @fundstrat #Crypto pic.twitter.com/pTTWJWlrz0
— Sam Doctor (@fundstratQuant) September 14, 2018
Since February, the cryptocurrency market has dropped around 80%; also the Bitcoin market cap has fallen over 70%. However, the mining activity has grown with time at an exponential rate.
The bear market always indicates a market where share prices drop and encourage selling. As indicators seem to fluctuate, the BTC complexity and hash rate start growing. It is said that this seamlessly makes the network resilient and robust.
However, miners usually continue to trudge along in bear market, to see if time gives a massive price drops or huge profits. This might signal good days further, considering the proponent’s outcome.
The cryptocurrency exchange Bitmex, proves one theory about the consequences of the occurrence. They states powerhouse mining operations like Bitmain adopts the market prices balancing out, as it removes weaker sides and enhances its relative position.
Bitmex further explains
These low prices are likely to be a deliberate strategy by Bitmain, to squeeze out their competition by causing them to experience lower sales and therefore financial difficulties. In our view, herein lies the key to one of the main driving forces behind the decision to IPO. A successful IPO may increase the firepower available to continue this strategy and eliminate advantage rivals could have by doing their IPOs first.
The powerful Wall Street investment firm, Fundstrat believes that the BTC hash power is due to the bear market. Since May, Bitcoin hash power is said to have raised 2x, with a brutal face around 70 percent price slide. The head of the firm, Tom Lee usually put ahead as a bullish pundit for the cryptocurrency.
The analyst at Fundstrat, Sam Doctor believes tweets about the situation saying:
Despite BTC bear market, hash power doubled since May to 57 EH/s – Even with upgrades to existing equipment, implies almost 1GW of new power consumption vs. 5.2GW in May ’18. Breakeven now $7,300 ($5,300 cash BE) vs. $6,000 in May.
We believe breakeven mining costs provide a support level for $BTC, as #miners – main natural #Crypto sellers – reduce selling at low $BTCUSD price. Based on expected computing hashpower and breakeven cost growth, that could imply #Bitcoin price of $36,000 by 2019 year end. pic.twitter.com/CVwIWNz8Lr
— Sam Doctor (@fundstratQuant) May 10, 2018
The BTC mining complexity can be reduced, however, the question arises should the amount of hash power fall. Moreover, miners find it difficult to identify the blocks in terms of complexity, which results in less earning for miners. In addition to this, a BTC reward modifies with every four years, making mining revenue at the climax difficult and volatile.
However, it’s not always controversial to hope that if BTC price drops, along with mining revenue, then their hash rate will follow the same. Mr. Doctor is advising otherwise. In fact, miners accept less profit than usual.
Nevertheless, the growth in the Bitcoin hash rate is a positive development for the complete cryptocurrency exchange market. This specifies that the network is growing bigger, powerful and more resistant to 51% attacks. In short, there is not a single doubt that in long-term whether or not bitcoin is definitely going to enhance manifolds.
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