The latest Glassnode report focuses on the topic of the day: bitcoin mining. While bitcoin’s price has been suspiciously flat for a while, the difficulty adjustment came in and registered an all-time high. Do the miners know something we don’t? Or is there a transfer of power going on behind the scenes? Glassnode poses a working theory on their latest The Week On-Chain. To begin with, Glassnode puts the difficulty adjustment into perspective:
“Bitcoin hashrate has reached a new all-time-high of 242 Exahash per second. To give an analogy for scale, this is equivalent to all 7.753 Billion people on earth, each completing a SHA-256 hash calculation approximately 30 Billion times every second.”
The thing is, we’re in a bear market. The sentiment is fearful. There’s trouble brewing everywhere in the world and bitcoin has been boring for a while now. What could be the reason for a hashrate all-time high? Is it, as Glassnode theorizes, “a new dynamic as more of the hashpower is held by better capitalised publicly traded mining companies”? Or is it just the game theory behind bitcoin at work? Remember that mining revenue is also down and the cost of one bitcoin is going up in tandem with electricity prices.
Making the situation more volatile, the miner revenue’s bitcoin is at a low point. This “should, in theory, create elevated income stress on the mining industry.” Add bitcoin’s stable prices to that equation and, what do we have? “It is extremely rare for BTC prices to stay so stationary for long, suggesting heightened probabilities of volatility on the horizon.”
Bitcoin Hashrate All-Time High | Source: The Week On-Chain
Bullish Signal: Bitcoin Hash-Ribbons Unwind
According to Glassnode, “the Bitcoin hash-ribbons commenced an unwind in late August, providing an indication that mining conditions were improving, and hashrate was coming back online.” What does this mean and why is it bullish, though? “Almost all historical hash-ribbon unwinds have preceded greener pastures in the months that followed.”
According to Glassnode, since bitcoin’s price is still flatlining, the “hashrate rise is due to more efficient mining hardware coming online and/or miners with superior balance sheets having a larger share of the hashpower network.” That’s the base of Glassnode’s takeover theory.
Glassnode Proposes “The Mining Halving” Concept
Another of their wild theories, Glassnode poses that…
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