- Charles Edwards is an analyst in the cryptocurrency industry.
- The hash rate of Bitcoin is much less volatile than the price of the asset.
Charles Edwards, a cryptocurrency analyst, recently made comments on Twitter, suggesting that there’s a 60% chance that a drastic drop in the hash rate of Bitcoin, known as miner capitulation, will happen soon. In order to stay involved with the bull run, the miners will have no choice but to run their operations anyway, taking a loss. Otherwise, they could choose to opt-out and lose the chance of gaining from the bull run.
There is ~60% chance of a Bitcoin miner capitulation.
But the extent of this HR growth plateau has never occurred before in Bitcoin's history.
Miners face a tough choice:
1) Mine more & accumulate more
2) Cut back & potentially 'miss' a major bull runhttps://t.co/DA5FR73aOI
— Charles Edwards (@caprioleio) November 18, 2019
Edwards reveals in a Medium article that he believes there to be a link between the hash rate and the price. When a large group of miners exits all at once, the new price bottom often correlates with the event. Therefore, as the included table from the article shows below, purchasing new Bitcoin when the local low of the hash rate occurs could create an opportunity for big returns on the investment.
The price of Bitcoin remains much more volatile than the hash rate. Since 2010, the biggest drop to ever be observed for hash rate has been only 53%. While this number might be a little higher than miners would like, it is still drastically lower than the 93% drop of Bitcoin, which is a record.
Mining difficulty for Bitcoin shows the amount of power required to solve each Bitcoin block. On November 7th, that difficult reduced by 7%. However, based on the growing hash rate, Plan B predicts that Bitcoin will be met with a positive adjustment next.