With the end of the first month of 2021 coming to a close, it’s hard to say whether this year has taken the start we’ve all hoped for in retrospect of what wrath 2020 has given us. But let’s not get into politics or other geopolitical nonsensical speak and focus on the beautiful world of cryptocurrencies. Specifically, bitcoin of course. The price as we all saw tear through price charts over $41k has been “quieting” down after the recent 25% cooldown we saw over the past two weeks. As large of a percentage and nominal drop this may seem, most traders and bitcoiners are ok with it. It’s a healthy correction needed from that anti-gravity upwards movement BTC took earlier. Here at Valarhash and amongst other people working in the bitcoin ecosystem, it’s what we would say a great time to focus on BUIDLing rather than be distracted by the constant media headline pumping after every $1,000 price increment.
Hashrates and difficulty continue to slowly plateau around the 150 EH/s level with the latter slowly increasing currently near 20.7 T. In what seems like a closed off competitive industry, bitcoin mining keeps on getting more and more newer competitors coming into the field as orders for the newest generation miners continue on backlogging.
Many analysts believe hashrates could hit 200 EH/s by the end of this year as those backlogged mining rigs should be released, shipped, and mounted on mining farms in time. From the peak of the last bull run in December of 2017 to the following year in December of 2018, hashrates more than doubled from 13 EH/s to 34 EH/s, and bear in mind prices plummeted throughout 2018. As we see newer miners coming into the fray, time will be the ultimate test as to whether they can survive another bear market as how the OG miners have been able to do so.
As famously done in the genesis block, the 3rd halving block, and now the metaphorical sinister block of 666,666, a message was inscribed on the block’s op_return data which reads:
“Do not be overcome by evil, but overcome evil with good — Romans 12:21”
The block, which was mined by BTC.com, is surely symbolic of the period we are currently living in as Covid, geopolitics, and rising tensions across the world have brought a visceral emotion to the current state of life. But one could also flip the switch on that and look at the bright spots, ala bitcoin. What bitcoins stands for varies for different people. But ultimately it’s a beacon for a new alternative to the financial sovereignty we seek and the way we visualize control. Although the message was taken from a biblical verse in the Holy Bible, the message is surely clear.
To take a look at another barometer of whether we have passed the peak of the 3rd bull run yet, many indicators say yes while others still portray a “we’re still early” motion. Let’s take a look at the Puell multiple which is calculated by dividing the daily issuance value of bitcoins (in USD) by the 365-day moving average of daily issuance value. Mathematically it looks like this:
In essence, this formula allows us to see if mining revenue currently, its more or less than mining revenue over the past 365 days. As the ratio goes up, the implications are that price is going up, and vice versa when the ratio goes down.
Historically over the past 5 years, we can use this ratio amongst certain points. For example, a ratio over 4 implies that the market is overheated and could be a good selling point. Whereas a ratio under 0.5 implies undervaluation and could be a good buying point. In the last bull run of 2017, that ratio went over 4 which then lead to a year’s long bear market until finally dipping under 0.5 at the end of 2018. Since 2017, we have not seen a ratio go over the 4 multiple just yet implying that the 3rd bull run is not yet over despite the recent correction.
“This metric shines a light onto the other side of the coin from the proverbial Hodlers of Last Resort, namely the Compulsory Sellers and the fundamentals of mining profitability that are at play in shaping Bitcoin’s market cycles. David Puell’s simple yet ingenious idea of adjusting this metric by its yearly simple moving average has produced a new, powerful and elegant tool to gauge the market cycles from a Mining Profitability/Compulsory Sellers’ perspective.” — David Puell
Quick Notes
As mentioned before in previous bi-weekly updates, the mining race is still hot with newer entrants buying up newer orders. Just recently Blockstream, a major bitcoin development team, announced its decision to buy $25M worth of bitcoin mining machines from MicroBT. The company hasn’t disclosed which ASIC miners they bought nor when it will receive them, but they do plan on offloading them onto their mining farms scattered across North America, boasting over 300 MW.
Perhaps better to keep it in North America at the moment rather than places such as Iran where government friction amongst miners are piling up to the point where finger pointing and blame for recent electrical outages are flying at each party. For just a quick primer, “Last year, the Iranian government issued a directive that all mining facilities in Iran must register with the government. The owners must disclose their identities, the size of their farms and what kinds of ASICs they are using. The government has also raised the electricity tariff from 482 rials to 1,930 for kilowatt per hour (in U.S. dollars, from 0.1 cent to 4.6 cents).” -Coindesk. So in places where miners think free money is at the border, and if you’re loud enough about it, you’ll be quickly getting glances in no time by regulators. To read more on the Iranian mining drama, click here, where you could learn more about the onslaught of a political struggle it’s turning into.
But to pivot more on the subtle side and lighter side of crypto mining, it is reported by bitcoin.com that a lone miner by the name of, Simon Byrne, installed a full mining gear infrastructure in the back of his BMW i8. Per the report in bitcoin.com, “The electric vehicle is capable of accelerating to 100 kilometers per hour in just 4.4 seconds. Per Hardware Times’ report, the mining system is powered by an ASUS B250 Mining Expert board and an EVGA SuperNOVA 1600 T2 power supply.” A great multi functional usage of having a mining set up be “mobile”.
Also, on a side note, our s19 and s19pro miners are now available today on 1TMine in our hashrate contract markets. In addition, another new batch of Z1 (ETH Miners) will be available later online.
About Valarhash
Chengdu-based Valarhash integrates mining machine sales, miner hosting, mining pool, and mine construction services. Led by CEO Fiona Lv, Valarhash aims to provide users with transparent and beneficial mining plans using advanced technology, with lower barriers of entry. Business operations cover hardware research and development, digital asset transactions and 1TMine hash power contract sharing. With a leading position in the hash power market, Valarhash integrates frontier resources with global vision, providing crypto compute service (CCS) and linking physical and digital worlds with blockchain technology.
For more information, please visit:
Website: https://www.valarhash.com
Twitter: https://twitter.com/VaIarhash
Facebook: https://www.facebook.com/Valarhash
LinkedIn: https://www.linkedin.com/company/vhash/
Medium: https://medium.com/Valarhash
Telegram: https://t.me/valarhashx1tmine_bitcoin
Media Contact
Email: BD@vhash.io
