Bitcoin’s hashrate has increased to some 80 quintillion hashes per second or exahashes (EH/s), up significantly from 64.49 EH/s on July 23, 2019.
That upwards increase has been continuing since December (pictured above) in a somewhat straight vertical direction.
Bitcoin’s price on the other hand was very horizontal until April, so did hash predict price?
Correlation obviously does not mean causation, but if there is any relationship it could be explained by Metcalfe’s Law which states that the value of a network is proportional to the square of the number of its users.
Imperfect because one user can obviously buy many asics, but if hash was in this case a leading indicator, then it may well be that people started betting bitcoin’s price will go up either by buying asics or by turning them on.
As bitcoin is an open network with its data immediately available (pending the two weeks difficulty adjustment), then this increase in hash can potentially be reflected on charts earlier than price.
That’s because there’s quite a bit that goes into the setting of price as Over the Counter (OTC) demand and supply gradually starts being reflected on open exchanges.
Meaning demand could rise without it being reflected on charts for weeks. While with hash it’s all mathematical code based like: if more demand (asics) then increase difficulty.
Some however take the view that the opposite is the case. That hash is a lagging indicator and follows price.
Does Hashrate Follow Price?
Bitcoin’s record setting hashrate and overall interest in BTC mining appears to coincide with the significant increase in the cryptocurrency’s value with its price surging by as much as 265% since January.
In June 2019, crypto Bull Max Keiser argued that the Bitcoin price follows the hashrate.