On November 3, 2018, Bitcoin’s hash rate was standing on 57.5 million TH/s. Now, the BTC hash rate dropped below 42 million TH/s, and we suspect that the Bitcoin Cash hash wars have the answers for this sudden decrease.
According to Blockchain.com’s stats, the main backers of the Bitcoin ABC proposal have lowered their BTC hash power significantly. Bitcoin.com, one of the backers of the proposal, has a share of only 0.9 percent among the pool of miners. Statistics show that the mining giant Antpool – that has been among one of the largest BTC mining pools has seen a drop of over 50% in its hash rate, taking out only 6.8 percent of the total hash rate of the BTC network.
Both Antpool and Bitcoin.com have rerouted their hash powers from BTC to BCH to increase the strength of the proposal they backed: Bitcoin ABC. Before both companies have marched to mine Bitcoin Cash, Bitcoin SV – the opposing party during the Bitcoin Cash hard fork – was leading the Hash Wars with approximately 75%. Now, it’s the opposite, Bitcoin ABC has 73% of the miners, while Bitcoin SV only 27%.
The expensive contest contribute to the dumping BTC?
A day before the Bitcoin Cash hard fork, the opposing parties have sent threats to each other, stating that they will start what is known as “the hash wars,” rerouting their hashrate from BTC to BCH. Soon after the threats, the crypto markets crashed with losses over 10% in a matter of a few hours.
As of now, the crypto downtrend went even further; BTC is standing a little over $4,400 while Bitcoin Cash suffered the most losses with its value worth only $218. On November 13, 2018 – two days before the BCH hard fork -, Bitcoin Cash’s price was $540. The coin suffered nearly 60% loss in a matter of a week.
It will be reasonable to correlate the expensive contest to the BTC’s price decline. In order to fund this costly war, the miners need to liquidate their Bitcoin to provide working capital to cover the marginal cost of the production of the two new coins.
But there is a small light at the end of the tunnel: We can assume that once the war is decided, the losing party of miners will revert their hash and capital to the BTC network. Also, it seems that more positive impact might arrive as institutional investors are likely to get more into cryptocurrencies, following the launch of the Microsoft, Starbucks, ICE-backed Bakkt and Fidelity. The launch of both platforms is expected to happen later this year.