‘Bitcoin Hash Rate Follows Price’, say Operator of Mining Pool – Will Old Miners Thrive?

Bitcoin [BTC] mining hash rate reached it’s All-Time High (ATH). on 7th January 2020, the total hash rate breached the 120m Th/s with a strong uptrend in price.

An US mining pool operator, Ethan Vera from Luxor Mining Pool told Bitcoin Magazine that the increasing hash rate is due to the re-starting of old miners which has now become profitable above $6500-$7000.

Chinese Dominance

Moreover, the mining pool operator also shined light on the reality of the global mining scenario with Chinese dominance. As reported earlier on CoinGape and a widely popular statistics around mining, is that, the dominance in China is around 60%.

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Nevertheless, according to Vera, it could be a lot more. Moreover, he also cites that some mining pools in China often provide exclusive mining pools to large private miners. This enables them to exclude the hash rate from their main mining calculations. He says,

“The amount of anonymous hash rate continues to increase. Likely the Chinese mega pools are providing large miners with private mining pools for their operations,” Vera said, adding that “from our knowledge, the major Western pools do not offer this product.”

Bitcoin [BTC] Total Hash Rate (Source)

Moreover, other countries also lend their hash rates to the large Chinese pools due to reliability, strength and liquidity. According to his estimates, around 90% of the mining pool are operated in China.

‘Hash Rate Follows Price’

The increasing hash rate signal strength of the entire network. Bitmain’s new S17+ miners have hit the markets in the recent months. Nevertheless, the total hash rate is still dominated by the old miners. he says,

“We have a few partners that were not mining with their S9s when BTC was below $7,500, but have since turned them on,” he said, later adding that, typically, “hash rate follows price (amongst other things).”

However, it also increases the selling pressure in the market. The mining difficulty ribbon is still in a squeeze despite the rising hash rate.

Bitcoin Mining Difficulty Ribbon (Source)

Hence, as new miners are slowly seeping the system, old miners are constantly choosing between switching their systems on and off.

A continuation of this price range along with new miners could further cause capitulation of old miners. However, an increase in price could expand the ribbon supporting a bull run.