From a fundamental perspective, Bitcoin has never been this strong.
The benchmark cryptocurrency has evolved from a speculative asset to a reserve asset that is widely used by retail investors, funds, institutions and corporations alike.
The increasing strength in terms of investor perception has also come as the chain has moved up, as virtually any network metric is far stronger today than it was a few years ago.
An example of this is BTC’s hash rate, which just hit a new all-time high this week and is now up over 36% from the start of the year.
Many analysts had previously warned of a “miners death spiral” resulting from the block rewards halving event in May, but it has not materialized.
On the contrary, Bitcoin’s hash rate is now the highest it has ever been and is showing no signs of slowing as the demand for the network remains incredibly high.
Bitcoin’s underlying strength increases as investors’ perceptions change
Historically, most of its investor base was made up of speculators who acted either actively or passively to generate USD returns, aside from a small group of core believers who believed in Bitcoin’s mission and future prospects.
That has changed since then, as ongoing pressures from extreme money pressures and impending inflation lead investors to turn to Bitcoin as a store of value protecting their capital.
Paul Tudor Jones was one of the first mainstream macro investors to call Bitcoin the “fastest horse” in the race against inflation and to provide part of his fund for the benchmark cryptocurrency.
MicroStrategy – a publicly traded company – announced a few months ago that it is taking steps to convert all of its USD reserves into Bitcoin.
Square – a multi-billion dollar tech giant – followed suit, announcing last week that they had bought $ 50 million worth of BTC to hold their books as reserve.
BTC’s hash rate is reaching new highs
It is important to note that this shifting perception that Bitcoin is a reserve asset rather than a speculative tool also comes along with the increasing strength of the chain.
Bitcoin’s hash rate hit a new all-time high this week, according to a recent report from Arcane Research.
“Bitcoin hashrate hit a new all-time high this week, with the average 7-day hashrate surpassing 140 EH / S. That’s 36% more than the hashrate as of this year, a clear indication that Bitcoin fundamentals are stronger than ever. ”
Image Courtesy of Arcane Research. Data via Glassnode.
The clash of strength in the chain coupled with the massive buying pressure resulting from Bitcoin’s newly discovered reserve status can have a significant impact on price.
Featured image from Unsplash.