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After fears of “capitulation” passed over the market, Bitcoin miners are back in the game, activating new hardware once again after May’s block reward halving.
As Bitcoinist previously reported, there’s been such a high amount of activity in the mining space that according to Bitcoin data analyst Digitalik.net, blocks are being mined (on average) at their fastest rate since June 2014.
The excitement among miners has been echoed by other blockchain analysts.
Rafael Schultze-Kraft, CTO of blockchain analytics firm Glassnode, shared on June 6th that on that day, were three separate hours in which 12 blocks were mined. This is notable because an average of only six blocks is supposed to be mined each hour.
“We’ve seen 12 blocks produced within a single hour three times today already. Yesterday 14 blocks were mined within a single hour,” he commented.
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This Is Bullish for Bitcoin
The frenzy of activity going on in the Bitcoin mining space confirms that the “miner capitulation” that analysts feared is already over or didn’t even take place.
Chief executive of Blockware Mining Matt D’Souza explained in response to Preston Pysh’s tweet that Bitcoin miners were able to swap out their inefficient hardware for new hardware, thus mitigating the brunt of the capitulation:
“S9s/mid gen are getting swapped out for next gen. Luckily, the manufacturers didnt accurately forecast. Next gen is sold out through October. […] There are 2 types of significant difficulty drops & I don’t consider them both miner capitulation: price induced and halving induced.”
Analysts also say that the rapid block times are bullish for prices.
Financial analyst and author Preston Pysh said that the “feeding frenzy” that is transpiring is “so bullish [for Bitcoin in the] long term.”
It shows that miners are profitable once again, mitigating a move lower in the market. Also, strong difficulty increases are often seen amid bull runs due to increasing popularity and increasing demand for the cryptocurrency.
Other Positive Trends Signal Upside
Pysh has identified other market trends suggesting that Bitcoin is fixed in an uptrend.
In a Twitter thread published recently, he explained that the fact that Grayscale Investments is accumulating such a vast amount of Bitcoin is positive for the market.
Pysh thinks that the effective BTC sink that the investment firm has created is boosting prices, as there simultaneously is more demand and a decreased supply due to the halving.
The analyst looked to the ongoing tensions between China and the U.S. over Hong Kong as another market catalyst. The U.S. is threatening sanctions in China over a new law proposed in the Hong Kong region that officials say erodes the autonomy of the special region:
“I think some of the bans on CNY companies and CNY currency moves have potentially caused a buying interest and hedge in BTC.”
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt The Ongoing Miner “Feeding Frenzy” Is Bullish for Bitcoin in the Long Run
The Ongoing Miner “Feeding Frenzy” Is Bullish for Bitcoin in the Long Run was last modified: June 9th, 2020 by Nick Chong