Increase In Bitcoin (BTC) Hash Rate Shows Investors Are Happy Long-Term

Bitcoin hash rates continue to increase despite the digital currency losing more than 70% of its value. David Sapper the CEO of Blockbid noted that the increase in the hashing power shows that investors are happy and comfortable with the long-term trend of the digital currency. According to Sapper, “This increase in hash rate shows that investors are happy and ready to accumulate what they get. At the moment they do not care about the losses since they are focused on the future. However, there are times when they have clear house & dump.”

What Is Causing The Hash Rate To Increase?

In a bear market, mining of cryptocurrencies can be less profitable since the same amount of electricity is in use. A good example is when a miner mines a bitcoin when its price is $15,000, he uses the same power when its price is $6,000. This means that the miner will incur the same cost of mining one bitcoin when its price is low and when the price is high.

When the price of Bitcoin went down, people expected the hash rate also to go down. However, this has not happened and the hash rate has continued increasing. Sapper noted that the continued increase in the hash rate shows that investors and miners believe that Bitcoin will recover its price. Genesis mining CEO Marco Streng believes that increased as the rate shows growth in the mining sector. He believes that the production of efficient mining machines by Samsung and Bitmain have led to the rise in hash rate.

Streng added that the introduction of sophisticated mining equipment covers drop-out miners. According to Streng, “We expect more expansions in the mining industry. The expansion will continue to grow in such a way that drop out miners will have no impact.”

In general, both Sapper and Streng believe that the increased hash rate is either caused by investor expectations or growth of the mining sector. The Bitcoin market is expected to recover in the near future. The digital currency has already lost more than 60% of its value since the start of 2017. The drop has seen some investors to panic leading to massive sales. However, the future of Bitcoin looks great and it’s likely to go mainstream.

Many institutional investors are already working on the digital currency. Major banks like Goldman Sachs and Barclays Bank have already launched a Bitcoin trading desk.