Keypoint to watch in D-34 BTC halving: Miner's hashrate

[Xangle]

Xangle’s viewpoint in D-34 BTC halving: Miner’s hashrate
https://s3.ap-northeast-2.amazonaws.com/upload.xangle.io/files/weekly+just+the+facts/200409/(Xangle)200409_EN_C.pdf

According to crypto disclosure platform Xangle, crypto investors must pay close attention to Bitcoin’s hashrate as the halving event is just around the corner – especially since previous halving events show that price follows hashrate.

The report states that Bitcoin hashrate has increased by more than 19,766% in a year since its first halving event in November 28, 2012. Price soared after, gradually increasing by a staggering 8,069%. The second Bitcoin halving in July 9, 2016 showed similar results – its price (+284%) followed the hashrate (+248%)

For such reasons, we must attend closely to BTC hashrate. However, this time there are several unexpected variables that might affect Bitcoin’s upcoming hashrate, including the coronavirus (the hashrate has decreased by 24% already). Please check the details in Xangle Just the FACTs.

[gentlemand]

especially since previous halving events show that price follows hashrate.

There've been repeated hash rate all time highs in recent times. They've obliterated 2017's hash rate. I did not notice much price action or enthusiasm.

Mining means nothing in regards to influencing the price. The miners contend with the price and related costs the market forces on them.

[pooya87]

The report states that Bitcoin hashrate has increased by more than 19,766% in a year since its first halving event in November 28, 2012. Price soared after, gradually increasing by a staggering 8,069%. The second Bitcoin halving in July 9, 2016 showed similar results – its price (+284%) followed the hashrate (+248%)

that is wrong and ignorant of a lot of things.
for starters price from 2012-11-28 to 2013-04-08 went from $11.75 to $259.34  which is a huge rise of 2107% in the same time frame hashrate went from 29 TH/s to 61 TH/s which is a tiny rise of 110%.
this proves that hashrate grows after price rise and at a slower speed not before it which means you can NEVER predict price by looking at hashrate since you would be looking at history.

secondly it is ignoring a very important revolution in bitcoin mining called ASICs. they were released in 2013 and by mid 2013 the hashrate rising speed changed because of them not because of price.

same exact thing for 2016 happened. the halving happened on 2016-07-09 by then price was already on the rise for 7 month from $150 to $778 which is 418% price rise. in the same time frame hashrate went from 1.0 EH/s to 1.6 EH/s which is a teeny tiny rise of 60% in comparison to price rise.
again you can see that hashrate follows price after price rise not the other way around.

same thing after the halving too. price went from correction at $465 to $1139 in 5 months right after halving but the hashrate went up from 1.6EH/s to 2 EH/s which is 145% price rise versus 25% hasrate rise.


conclusion: hashrate follows price.

[tsaroz]

Hashrate is not a direct measure of bitcoin price but an increase in hashrate mostly means positive prediction from the miners. The generated bitcoins don't increase with the increasing hashrate and increasing hashrate means decreasing reward for the miners. Halving is another event that about halves the miners profit, if the price doesn't increase, the miners may go into loss after a halving.

[gentlemand]

Hashrate is not a direct measure of bitcoin price but an increase in hashrate mostly means positive prediction from the miners.

It could be mean cheaper and better mining machines or better power deals. It's nothing much to do with tomorrow's price. They have massive outgoings to meet today. If you'd told people on here in 2017 what the hash rates would be today and asked them to guess the price they'd be saying it was telephone numbers rather than 3-6x lower than back then.

[DarkDays]

especially since previous halving events show that price follows hashrate.

There've been repeated hash rate all time highs in recent times. They've obliterated 2017's hash rate. I did not notice much price action or enthusiasm.

Mining means nothing in regards to influencing the price. The miners contend with the price and related costs the market forces on them.

Truth.

I think it was the case back on the earlier days as miners used to backsell their Bitcoin, which could directly influence the price.

But now the price action and hash power don't seem to be correlated. Hash rate has been on an upwards trajectory for well over a year, whereas Bitcoin has.... obviously not done so well.

We will continue to see the hash rate increase while it's still profitable, it's as simple as that.

[davis196]

According to this article:
https://cointelegraph.com/news/hash-rate-spike-relates-to-btc-price-but-halving-throws-miners-off-their-game

Singhal also pointed out that China, a nation that accounts for more than 60% of the world’s mining activities, forced the crypto community to reduce their digital footprints during its recent lockdown. In Singhal’s view, another reason for the drop could have been that many miners may have pulled the plug on their day-to-day activities temporarily so as to upgrade and prepare for the Bitcoin halving that is scheduled to take place in May.

Providing insight on the matter, Max Sklar, an engineer for the independent location technology platform Foursquare and the host of The Local Maximum podcast, pointed out to Cointelegraph:

    “There’s another side to the equation which is the cost side.In the long term, that’s about investing in the efficient mining machines and deploying them in the right areas, particularly areas with low energy costs. I suspect that the rise in the hashrate we are seeing now is caused in part by miners finding cheaper energy costs during this global crisis and restructuring, combined with the price stabilizing and more efficient hardware being deployed.”

During the last month,electricity prices on most EU markets are going down,this is an opportunity for some EU miners to get some cheap electricity.Maybe this factor,combined with what's happening in China is influencing the Hashrate drop.
60% of BTC mining is conducted in China,the only country that successfully defeated coronavirus(if we trust their propaganda  ) .I think there's nothing to worry about.

[hugeblack]

conclusion: hashrate follows price.

I am also inclined to this theory, although I think that by ignoring all the indicators, the hash rate becomes a good measure of price changes.
if we go back to the reason for the recent fluctuation in hash rate, it is that mining track all the physical things in our lives that have been affected by the previous pandemic.
What happened in 2017 was manipulation to pump more money to manipulate prices by making fees higher, and we cannot ignore the repercussions that occurred after BCH hard fork. So the historical scale will be what happened in 2013, which was explained above.

[Carlton Banks]

Mining means nothing in regards to influencing the price.

hashrate follows price

sorry gentlemen, but this cannot be true


mining most certainly does influence price in the most foundational way: with zero hashrate, there is no network, and hence Bitcoin is meaningless (and hence worthless). That means that every additional hash per second is at a minimum serving as ballast against a hashrate of zero.

and this is without paying regard to the fact that the hashrate provides protection against several different attacks, and that the amount of protection is commensurate with the hashrate (i.e. Bitcoin is increasingly safer from these attacks the more the hashrate increases).

One cannot directly correlate the effect of changes in the network hashrate with changes in the market price, but if we fail to recognize that hashrate is a (literally) vital part of what makes up Bitcoin's value proposition (and price is a measure of Bitcoin's value), that would constitute a fatal misunderstanding Bitcoin's market dynamics.

[squatter]

Mining means nothing in regards to influencing the price.

hashrate follows price

sorry gentlemen, but this cannot be true

mining most certainly does influence price in the most foundational way: with zero hashrate, there is no network, and hence Bitcoin is meaningless (and hence worthless). That means that every additional hash per second is at a minimum serving as ballast against a hashrate of zero.

and this is without paying regard to the fact that the hashrate provides protection against several different attacks, and that the amount of protection is commensurate with the hashrate (i.e. Bitcoin is increasingly safer from these attacks the more the hashrate increases).

One cannot directly correlate the effect of changes in the network hashrate with changes in the market price, but if we fail to recognize that hashrate is a (literally) vital part of what makes up Bitcoin's value proposition (and price is a measure of Bitcoin's value), that would constitute a fatal misunderstanding Bitcoin's market dynamics.

I fully agree there.

We can't know the extent that miners respond to price changes, nor can we know the extent that users or investors respond to hash rate changes. With that in mind, I consider it a wash.

The only thing I'd be concerned about is a fast and substantial drop in hash rate, to a degree where it would harm network usage. I assume that would accompany a substantial price drop as well. It doesn't really matter which caused which.

[Artemis3]

This is destined to happen, mining is simply getting less and less profitable overtime, as production of coins is less and less so. Hashrate will gradually lower too, well maybe. Its a bit offset by asic mining getting better, but that industry too will soon stop being profitable (R&D of sha256 asics).

This is not the end of the world like some people think. First its not an on/off switch (just like peak oil) it occurs gradually. Second the reason miners quit is because its too expensive, and that means attacking Bitcoin is also too expensive, so even with a somewhat lower hashrate it isn't getting any riskier.

Logically the most expensive places like Europe stop mining first, until even in the last country on earth (with the cheapest electricity) it becomes too expensive to continue. And yet, after that there are: The people with "free" electricity (renewable, powerplant owners, whatever) and those who just don't care to lose money doing it (or have a Bitcoin related business and want to contribute). This is how in the next 119 years bitcoin is going to mine those less than 3 million coins that remain, with the vast majority in the following next years.

Those that think that unless mining is profitable Bitcoin dies, are wrong, and time will tell. Because this is unavoidable, in fact its written in the code...

But yes, the possibility of price rising enough to keep mining profitable for longer exists, it has already happened before. But it is my opinion that this is going to be less and less so overtime. The market is great self regulating itself.