On March 1st, the hash rate of the bitcoin network hit its all-time high at 136.26 Th/s and since then has been declining as the price of Bitcoin crashed. On March 25th, it declined further to 75.7 Th/s as per Blockchain.com.
With this drop, the total amount of computing power contributing to secure the network recorded its highest decline ever of 45% in line with the 50% decrease in the price of bitcoin.
As we reported, currently the cost of mining one bitcoins is $7,300 that has turned miners unprofitable at current price levels which is just around $6,600.
As analyst Mati Greenspan said, a lot of miners were running old machines and were “barely profitable” before the BTC price crashed. Had it not declined, they would have run those machines into the halving but not anymore.
“It’s important to note that we were expecting some sort of miner capitulation after the halving event. The fact that it’s come a bit early is really of little significance,” said Greenspan.
Today, the network difficulty also took a drop of 16%.
“This March, Bitcoin has seen the largest drop in absolute hashing power in the history of the network, and its difficulty is set to experience one of its biggest adjustments yet,” noted Glassnode.
A relative measure of how difficult it is to find a new block, the difficulty of the network adjusts every 14 days. With a 15.61% decline, it has recorded the second-biggest drop in Bitcoin’s history after 18% in November 2011.
While bitcoin fundamentals are not having a positive March just like the price, the digital currency has a long way ahead.
“Every day that passes, bitcoin takes one more step towards becoming a global phenomenon that changes the way we think about our wealth, our time, and our freedom,” reads crypto exchange Kraken’s latest report.
This could further accelerate as central banks around the globe pumps in trillions of dollars in financial markets. Also, yields on 1-month and 3-month Treasury bills have fallen into negative territory.
Such a situation makes bitcoin, a deflationary asset with a hard cap of 21 million supply an attractive asset.
As per Kraken’s report, the US would see a generational shift of $70 trillion. This wealth transfer from Boomers to millennials, the Bitcoin-friendly generation would see $971 billion investment in bitcoin. This could be much higher if the world investment is also taken into consideration.
We have been already seeing millennials investing “heavily” in bitcoin, giving it preference over Microsoft and Netflix. Also, a 2019 survey revealed that 42 percent of younger respondents are likely to purchase BTC in the next 5 years while 8% of the older crowd is also interested in buying bitcoin. This puts the implied price of bitcoin at around $350,00 in 2044, as per Kraken.