Bitcoin is currently down. Though there are those like Tom Lee saying that Bitcoin is going to surpass its all-time high this year, the fact is that Bitcoin is now trading below $8,000. One of the reasons for this is the possibility that institutional investors are waiting for regulatory clarity.
You also have to consider the reality that the entire cryptocurrency market cap dropped to $400 billion. During its peak, it experienced going over $830 billion.
The US Department of Justice already launched a probe on the possibility of market manipulation. In addition to this, other parts of the world are also doing their job when it comes to having stricter rules in the crypto space. Japan, for instance, is now looking to implement new rules regarding the operation of cryptocurrency exchanges in order to prevent another incident such as Coincheck.
Bearish Days Are About to End?
However, if you will look at the hash rate, it seems that Bitcoin has a bright future ahead. But before anything else, what exactly is a hash rate? It reflects the number of guesses made in any given second when it comes to solving the computational puzzles of Bitcoin.
There is an increasing number of Bitcoin miners. In fact, there was even a study regarding the environmental impact that Bitcoin mining can bring to the table.
A lot of experts see the increasing hash rate as a healthy price indication. It only means that there is an increasing number of people that are mining Bitcoin which translates to people who are anticipating for the next bull-run.
On the contrary, a descending hash rate would mean that a good number of miners have stopped their operations or even jumped ship after losing faith in Bitcoin’s value.
There are some main players when it comes to Bitcoin mining. For instance, BTC.com accounts for the 23.4% of Bitcoin mining power. And it looks like it is going to continue in the coming years with its highly efficient ASIC mining equipment. Then, you also have players like Bitmain that evolved into a multi-national corporation now operating in three different countries.
Could the Miners be Right After All?
Could the miners be right after all? Could they be expecting the entry of institutional investors that can bring serious capital in the digital currency world?
Or perhaps, it seems that miners are now taking a long-term view when it comes to Bitcoin and its overall potential. Despite reaching below $8,000 coming from an all-time high a few months ago at almost $20,000, it only shows the confidence that miners that they choose to ignore the downtrends. This could create a ripple effect on investors.
There are investors who are optimistic regarding the second and third quarter of Bitcoin. Could Tom Lee be right all along that institutional investors are simply waiting for the right time to enter the market waiting for regulatory clarity? Aside from miners, there are already some businesses that are readying their next move. There are already some players that are offering products catering to institutional investors.