Following bitcoin’s explosive growth in 2017, this year has shaped up to be very quiet and the price has contracted a lot, sitting at $6,200 today, down from almost $20,000 at its peak last year. Despite this, the hash rate - essentially the rate of mining going on - has increased by a whopping 155% since the start of the year. Evidently, faith in bitcoin hasn’t been lost yet.
According to Cryptoslate, the main reason for the increase in hash rate is that each block reward of 12.5 bitcoin is worth about $78,000 so miners are still eager to see how much they can extract. This huge reward, however, will not last forever. On May 25, 2020, the next so-called halvening will occur, decreasing block rewards down to 6.25 bitcoin per block or about $39,000 at the current price, so there"s a rush to mine as much bitcoin as possible.
Despite the cooling down of enthusiasm surrounding bitcoin, there are still optimists. For example, in April, the tech investor Tim Draper who invested in Tesla, Skype, and Hotmail early on suggested that bitcoin would be priced at a whopping $250,000 by 2022 - luckily for him, he is holding 30,000 btc.
Jack Dorsey, Head of Square and Twitter, has also suggested that bitcoin could become the single global currency in just ten years. Despite this optimism though, several countries including Iran and Pakistan have both banned cryptocurrencies making them hard to purchase in those countries.
Let us know in the comments whether or not you think bitcoin will pick up steam again.
Source: Cryptoslate