11/28 ANDY HOFFMAN (CryptoGoldCentral.com): Bitcoin’s Price Versus Hash Rate

in #andyhoffman5 years ago

In stocks, they say “price follows volume” – as in, the more buyers that enter a space, the more likely selling pressure is exhausted. In crypto, the congruent mantra is “price follows hash rate” – as in, the more mining activity, the more demand for the underlying token.

In Bitcoin’s case, with minor exceptions – better put, statistically insignificant blips – its Hash Rate has risen non-stop since inception…PARTICULARLY since SegWit was locked in last summer. I.e, a TWELVE-FOLD RISE since the chain’s immutability was forever cast in stone.

https://bitinfocharts.com/comparison/bitcoin-hashrate.html

This, as its main “competitor,” BCash, has seen its hash rate DECLINE since inception. That is, until Bitmain stared selling Bitcoin like mad this month, destroying its hideously damaged balance sheet further to artificially boost ABC’s meaningless hash rate to fend off SV…an effort, at least, that appears to have succeeded - given ABC’s increasing hash rate gap; and SV giving in, offering replay protection.

As you can see by the shorter-term chart below, Bitcoin’s hash rate peaked November 1st – after quadrupling SINCE THE PRICE FIRST BOTTOMED AT THE “HOFFMAN LINE” (i.e, a $100 billion market cap) IN EARLY FEBRUARY. In other words, validating exactly what I have written all along about institutional participation.

https://bitinfocharts.com/comparison/bitcoin-hashrate.html#1y

That said, Bitcoin’s Hash Rate plunged nearly 40% this month – in turn, causing the Hoffman Line to break, and the price to plunge nearly 50%. So, the big question is, was the Hash crash solely due to miners’ preparation for – and participation in – Faketoshi’s “Hash War?” Or alternatively, were there other reasons why Bitcoin’s Hash Rate plunged so sharply in just four weeks’ time?

Sure, one can point to the Bakkt physical Bitcoin futures platform being delayed from December 12th to January 24th; and per yesterday’s news, a likely indefinite delay of the SolidX/VanEck Bitcoin ETF’s SEC approval. However, as I tweeted this morning, these were fait accompli events once the Bitcoin price plunged – as given sector weakness, there is ZERO pressure on the SEC to approve something it doesn’t want to approve in the first place. In other words, in the context of current market conditions, a complete non-event.

https://twitter.com/Andy_Hoffman_CG/status/1067773318751604737

Sure, I could be “missing something,” but I highly doubt it – especially now that crypto prices, across the board, appear to be recovering. In hindsight, I think the “crypto crash of November 2018” will be viewed in hindsight as yet another failed attempt to usurp Bitcoin – AGAIN, emanating from the pathetic BCash camp…which in turn, will be followed by a business-as-usual return of Bitcoin’s Hash Rate; a recapturing of the Hoffman Line; and ultimately, new all-time highs, as we rapidly approach the May 2020 halving.

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Interesting info... glad i powered up a bit!

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