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William Clemente: Is Bitcoin's Declining Hash Rate Cause For Concern? | Bitcoin Review #6  July 2, 2021

July 2021 - Crypto

posted by First Trust SkyBridge Crypto Industry and Digital Economy ETF
3yrs ago

In this week's episode of SkyBridge Bitcoin Review, SkyBridge managing partner Anthony Scaramucci, president Brett Messing, and guest William Clemente discuss the recent correction in Bitcoin’s hash power due to China's crypto crackdown.


Bitcoin's hash rate refers to the magnitude of computer processing power contributed to the network through mining. Historically, Bitcoin's price and hash power have correlated, without strong evidence of which is the leading indicator. As price grows, mining rewards become greater, but as hash power grows, the difficulty of obtaining mining rewards also grows. After Bitcoin's recent price drawdown, we are now seeing an even more dramatic correction in hash power, stemming largely from China's crypto crackdown.


The Bitcoin network is currently going through an important transition. Only last month, an estimated 70% of global hash power emanated from Chinese miners. However, following China's recent aggressive crackdown on all things crypto, more than 90% of Chinese Bitcoin mining has already gone offline. Mining equipment is quickly being shipped to foreign locales, ranging from North America to Kazakhstan, but the short-term effect on hash power has been dramatic.


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ALL ALPHAMAVEN CONTENT IS FOR INFORMATIONAL PURPOSES ONLY. CONTENT POSTED BY MEMBERS DOES NOT NECESSARILY REFLECT THE OPINION OR BELIEFS OF ALPHAMAVEN AND HAS NOT ALWAYS BEEN INDEPENDENTLY VERIFIED BY ALPHAMAVEN. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THIS IS NOT A SOLICITATION FOR INVESTMENT. THE MATERIAL PROVIDED HEREIN IS FOR INFORMATIONAL PURPOSES ONLY. IT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY INTERESTS OF ANY FUND OR ANY OTHER SECURITIES. ANY SUCH OFFERINGS CAN BE MADE ONLY IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN THE INVESTMENT'S PRIVATE PLACEMENT MEMORANDUM. PRIOR TO INVESTING, INVESTORS ARE STRONGLY URGED TO REVIEW CAREFULLY THE PRIVATE PLACEMENT MEMORANDUM (INCLUDING THE RISK FACTORS DESCRIBED THEREIN), THE LIMITED PARTNERSHIP AGREEMENT AND THE SUBSCRIPTION DOCUMENTS, TO ASK SUCH QUESTIONS OF THE INVESTMENT MANAGER AS THEY DEEM APPROPRIATE, AND TO DISCUSS ANY PROSPECTIVE INVESTMENT IN THE FUND WITH THEIR LEGAL AND TAX ADVISERS IN ORDER TO MAKE AN INDEPENDENT DETERMINATION OF THE SUITABILITY AND CONSEQUENCES OF AN INVESTMENT.