Bitcoin Hashrate Increases in A Bear Market, Investors are Still Optimistic in the Long Term
Bitcoin declines in a rapid speed these days. People take it for granted that mining activity is expected to follow, but fortunately, that hasn’t happen.
According to a cryptocurrency news outlet CryptoBuzz, BTC mining difficulty has been growing 15% per month in 2018 and at present, it is 3 times more difficult to win a bitcoin block reward than it was in January.
Although bitcoin price has fallen past the break-even points, the hashrate of the bitcoin network has continued to increase. Which means bitcoin mining is still profitable enough for some efficient miners while small players have been squeeze out as bitcoin price fall to the $6,000 level.
Marco Streng, CEO of Genesis mining indicated that mining giants are still about to expand their mining business in an interview with Bloomberg:
“There are still major expansions happening, especially from more efficient miners. The expansion is so big that it compensated for the drop-out of not-so-efficient miners.”
In this condition, efficiency is the key factor in bitcoin mining. According to a report from CoinShares, miners with high-efficient manufacture equipment have the benefit of immediate and cheaper access to their hardware and can adjust prices of their devices to maximize profits.
Mining giants such as Bitmain and Bitfury have become the major client of semiconductor manufacturers, including Nvidia Corp. and Taiwan Semiconductor Manufacturing Co. (TSM). They are seeking for advanced mining devices which may lower the mining cost.
In a bear market, cryptocurrency mining can become less profitable due to cost of energy, electricity and resources that are used to mine each token. However, the hashrate of the bitcoin network has continued to increase at an exponential in 2018.
David Sapper, CEO of Melbourne-based crypto exchange Blockbid indicated that the continus rise in the bitcoin hashrate reflects the satisfaction of investors of the mainstream cryptocurrency in the long-term trend:
“The increased hash rate means people are here for the long-term because they’re happy to just accumulate what they have, potentially even run at a loss. At the same time, they do sometimes have to clear house and dump.”