It was the death spiral that some analysts had expected. But instead hashrate broke the record.
Following the bitcoin (BTC) block award split that took place in May, some analysts had expected a “death spiral” to take place. The term” death spiral " was first used in 2018 on the possibility that BTC could fall to zero. According to the statement, after the block Award half, miners could terminate their operations and, in this case, the BTC price could be reset due to too slow or not happening at all. This situation has been dubbed the “death spiral”.
However the expected did not materialise and the miners did not terminate their activities. In fact, emerging new data shows that miners are feeling more bullish than ever.
Bitcoin has set hashrate a new record, according to crypto data firm TradeBlock. The company said in a statement on July 7 that its bitcoin hashrate had over 124 exahashes. This figure is nearly double the figure seen in the same period last year.
Analysts assessing this data said that the “death spiral” approach was not real, and in fact, signals of a rise in price were received on the contrary. Analysts 'views are also supported by Charles Edwards' price model. According to Edwards, Bitcoin's price always centers on energy consumption in Joules. Currently, the price is trading 27% lower than it should be, according to analysts based on this model.
Hashrate, on the other hand, is described as the measure of computational power used to secure transactions in a Blockchain network, and Bitcoin.org’Hashrate is the unit of measurement of the Bitcoin network's trading power, “he said. When the network reaches 10 Th/s hashrate, it means it can do 10 trillion calculations per second."statements are being used.
Why Did Hashrate Increase?
There are two factors that increase bitcoin's hashrate after the block Award half-time: the rainy season in China and the fact that mining firms are launching new ASICS.
The vast majority of the Bitcoin network is supported by Chinese hydroelectric farms in the River regions of China. Currently with the rainy season in China, hydroelectric rates are much cheaper than at other times of the year. That's why miners find a different incentive to work.
In addition, mining companies are launching new ASIC devices, making Bitcoin mining more profitable.