The hashrate for bitcoin broke its all-time high record on Aug. 19, which has led Max Keiser to predict that a price increase will follow.
Bitcoin Hash Rate
For blockchain-based projects like bitcoin, a higher hashrate means that the network is more secure, further driving investor confidence in the product. It also gives a snapshot of the amount of ‘labor’ being contributed to bitcoin, which creates more competition for miners and shows they’re betting on the cryptocurrency, as mining is resource intensive and has singiifcant energy costs.
Earlier in the month, crypto analyst and bitcoin bull Max Keiser posted a tweet that bitcoin price “follows hashrate,” and that hashing has been on a bullish trend for nine years.
— Max Keiser, tweet poet. (@maxkeiser) August 8, 2018
Increased hashing power can indicate market confidence, but it also creates higher operating costs for miners obtaining block rewards. The prevailing theory has been that increased competition for BTC drives up value inherently, as miners are forced to sell at a higher price to cover costs.
Not everyone agrees that the “Labor Theory of Value,” applies to bitcoin, but Keiser is adamant that hashing is a bullish indicator.
Disagree. BTC’s value/hashrate is being driven by forces completely outside our control or comprehension. Sure, the price will explode higher, but will anyone be left to see it?
— Max Keiser, tweet poet. (@maxkeiser) August 9, 2018
The price of BTC jumped more than 5% on Aug. 19 after trending downward for a week, after a ‘Fear and Greed Index’ flashed a buying signal after pointing toward extreme fear.