Since last year the bitcoin hash rate — the amount of computing power used by bitcoin’s network of computers to create new coins — has soared as it rushes to catch up with the bitcoin price.
The sudden rise in the bitcoin price, which climbed from around $1,000 at the beginning of last year to almost $20,000 by December, led to a huge influx of new miners adding their computing power to the bitcoin network – according to an article on Forbes.
However, despite bitcoin’s price stumble in 2018, the hash rate has continued to grow — increasing over 100 percent over the last four months, CoinJournal spotted. Over the same period the bitcoin price has slumped by a third.
Though it takes time for miners to add their computing power to the bitcoin network following a jump in the price, the bitcoin hash rate doesn’t shrink if the price falls — suggesting miners aren’t turning off from bitcoin.
While the bitcoin price has been on a downward trajectory for the last few months, a consistently climbing hash rate suggests the long-term outlook for the bitcoin price is good.
Meanwhile, bitcoin bulls have this week been talking up the price of bitcoin.
By the end of this year bitcoin will hit $25,000, more than 270% above current levels, according to Fundstrat Global Advisors head of research Thomas Lee.
Lee is basing his prediction on bitcoin’s historical trading price of 2.5 times its mining cost, which Lee expects to reach $9,000 by the end of the year.
Others have pointed to bitcoin’s functionality for their faith in the cryptocurrency.
“If you want to own the asset that you can actually use today and that people are functionally using, it’s bitcoin,” Bart Smith, head of digital asset at trading giant Susquehanna International Group, told CNBC.
Julian Hosp, president and co-founder of crypto wallet and card start-up TenX, told CNBC the bitcoin price could potentially hit $60,000 even though the cryptocurrency is trading some 67% below its December highs.
“If we see over $10,000 by the end of August, we can see the $20,000, then the press, the media is going to come in, and we can still see the $60,000 this year,” Hosp said. “I predicted for 2018, we’re going to see $5,000 and $60,000. So $5,000, we pretty much hit it, so let’s see if we can do the $60,000. I’m still quite confident.”
Not all are on the same page, however.
Earlier this week Nobel Prize-winning economist Joseph Stiglitz said that digital currencies will be “regulated into oblivion” and bitcoin could be “worth just $100 in 10 years” due to money laundering crackdowns.