Bitcoin has had a rather eventful weekend, which started with its price surging past $9,000 and reaching as much as $9.150, only to start spiraling down. The coin lost $500 by the start of the new week, dropping to $8,650, which is where it sits at the time of writing.
The new BTC price behavior is believed by some to have been influenced by the project’s hash rate. As some may know, many analysts have theorized that Bitcoin’s price is bound to follow its hash rate. While a number of others believe that there is no correlation between the two, the fact is that BTC price experienced a surge only two days after its hash rate hit a new milestone.
Just before the arrival of this last weekend, the BTC hash rate hit an entirely new ATH of 126 Exahash, which translates to one quintillion (126,000,000,000,000,000,000) hashes per second. This is a massive growth when compared to the hash rate from mid-January 2019 when the hash rate was only a bit below 38 quintillion hashes per second.
The mystery of BTC price and hash rate
Bitcoin’s hash rate is basically the amount of computing power that BTC miners provide to the BTC network at any given time. This computing power comes from powerful mining computers that are used for solving cryptographic equations, with each guess at a solution representing one hash.
Now, as mentioned, many assume that the hash rate is important for predicting the short-term behavior of BTC price, as it indicates the miners’ confidence in the network’s future. In other words, the more miners there are, the more computing power they contribute, and the higher the hash rate become. Some believe that the price surges as a result.
With BTC halving coming closer and closer, it is expected that the coin’s price will grow due to greater demand and lower supply, as the number of BTC earned from solving blocks will be cut in half. And, with many expecting that the price will surge, more miners have joined the network.
The two theories regarding the price and the hash rate are that they follow one another. One claims that price follows the hash rate, and the other says that it is the other way around. For now, there is no clear answer, although there is a bit more evidence to claims that the price leads, and the hash rate follows.