Bitcoin, the most valuable cryptocurrency by market capitalization, is seeing tremendous network expansion, indicating that the Bitcoin ecosystem is on the verge of a big comeback. According to new data from cryptocurrency on-chain monitoring platform Glassnode, Bitcoin’s hashrate is just approximately 4% away from reaching an all-time high.
Recall that China’s Bitcoin prohibition resulted in a more than 50% decline in hashrate. However, since the market has become more stable, hashrate has increased by more than 90%.
“Bitcoin hashrate has almost fully recovered, lying barely 4% behind the all-time high” (7-day moving average basis). In May, the network hashrate decreased by more than 50% as a result of China’s prohibition on Bitcoin mining. Since then, hashrate has increased by 93 percent, reaching 172 Exahash/s today.” – The Glassnode
Is it possible that China made a mistake by excluding Bitcoin into the country?
Increases in Bitcoin’s hashrate are beneficial for the network’s security. Typically, a high Bitcoin hashrate indicates that the Bitcoin network is seeing a surge in processing capacity, which bolsters the network’s security.
This latest event is only one of several indicators that China’s hold on the Bitcoin market has eroded dramatically. With China previously being an official participant in the crypto business, its efforts have historically raised or diminished the price of Bitcoin on a one-to-one basis. That will no longer be the case in the future, but market participants are split on whether this represents a victory or a loss for China.
Charlie Munger, a millionaire investor who is also Warren Buffett’s right-hand man, recently said that China “…made the proper choice, which is to just prohibit them [Bitcoin].”
Bitcoin proponent Michael Saylor has a radically different perspective, claiming that China committed a trillion-dollar error. When questioned about the long-term implications, he said the following:
“China had a 50% market share in Bitcoin and was making $10 billion per year in a company that was expanding at a rate of 100% per year, but the government clamped down on it, thereby eradicating the whole sector from China. Given the increasing pace of Bitcoin, I believe that this will prove to be a trillion-dollar error for China.”
Several states in the United States, as well as other nations, have thus far welcomed bitcoin miners enthusiastically. Bitcoin is predicted to bring these States billions in income.
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