Jason Deane, an analyst at Quantum Economics and a Bitcoin (BTC) researcher, published a detailed explanation of the possible ways network difficulty adjustment may affect the price of the orange coin.
Bitcoin (BTC) in the crossfire
According to Mr. Deane, the Bitcoin (BTC) network is going through significant changes right now, while its price is dumping 'aggressively and consistently'. This recession is particularly painful for the operators of old mining rigs, including the legendary Bitmain Antminer S9.
After the tremendous price drop, mining on the majority of ASICs became unprofitable. As reported by U.Today, in the early days of March, 2020, the break-even price for Antminer S9 was about $7,518. As a result, many miners decided to switch off their ASICs and even sell them.
Alongside that, after the recent difficulty adjustment, Antminer S9 returned to the game. Mr. Deane highlighted that
This is all normal and these sorts of variations happen all the time for a number of reasons.
One extra consideration
The upcoming Bitcoin (BTC) third halving event is one more meaningful input for mining profitability calculations. As miner rewards will be reduced by 50%, they should replace old mining gear with new ones. In front of this reduction, the price drop 'has simply accelerated that process', Mr. Deane concluded.
All in all, the reduction in hash-rate and difficulty can be explained by the lower price, proximity of halving as well as the element of market uncertainty.
Furthermore, in long-term prospects, the Bitcoin (BTC) price will care little about mining technics. Mr. Deane is sure that, instead of hashrate fluctuations, only three things really matter:
- Bitcoin (BTC) adoption,
- Bitcoin (BTC) usage, and
- Standard supply/demand rules.
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