BTC dropped below $30k yesterday for the first time since July 2021 and is currently trading hands at $31.8k.
BTC dropped below $30k yesterday for the first time since July 2021 and is currently trading hands at $31.8k. This downward shift serves as yet another stark reminder of how entangled bitcoin has become with wider macro themes. Risk-on assets are performing poorly across the board: the tech-heavy Nasdaq 100, with which bitcoin price has correlated strongly recently, last week registered its worst day of trading since 2020. These broad trends are a result of the Fed's increasingly hawkish monetary policy – further 0.5% interest rate hikes will be considered at upcoming meetings following this month's increase – aimed at rampant inflation. The central bank even suggested that it would stomach recession to keep inflation under control. However strong its fundamentals are, the likelihood is that bitcoin's growing reliance on institutional investment means that its recovery will be constrained by market sentiment – at least until inflation is deemed "under control".
Bitcoin network hashrate shows no signs of slowing down: its 14-day moving average is up slightly from last week to 222 EH/s, having set an all-time high of 224 EH/s earlier this week. Difficulty, unadjusted since last week, is set for a 5.5% increase tomorrow to 31.4T, meaning a second consecutive, new all-time high. For hash price, it's the same story as last week. With both BTC and difficulty moving against it, mining profitability has fallen to $0.13 - with a further decline due upon tomorrow's difficulty adjustment. Per miner revenues are now at just 32% of October's highs. The flipside is that now is a good time to buy hardware. Many of mining's largest players are taking advantage of depressed machine prices to accumulate new hashrate: Argo Blockchain has just announced a $70m loan agreement with New York-based investment manager NYDIG to help fund new purchases. With every adversity comes an opportunity. Happy mining!