Bitcoin's hash rate discount is reportedly at its greatest since 2020
According to the senior commodity analyst, positive on Bitcoin, the relative discount to hash rate has reached levels last seen in the first quarter of 2020
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The greatest since the first quarter of 2020, according to senior commodity strategist at Bloomberg Intelligence Mike McGlone, Bitcoin's relative discount to its peak hash rate in October might soon lead to a return to "its propensity to outperform most assets."
The analyst said in a tweet on October 19 that the relationship between Bitcoin's rising hash rate, which is a gauge of the blockchain's processing power and security, and its price points is concerning "to risk/reward leaning favourably."
Theoretically, according to many, Bitcoin's hash rate should increase concerning the currency's price. In October, the 10-day average hash rate for Bitcoin was "roughly equivalent" to the level it should be at, which is around $70,000, according to a graph that McGlone displayed. By contrast, as of October 18, the cost is approx to $19,500.
According to McGlone, the last time there was such a disparity between the price and the hash rate was during the "1Q 2020 swoon" -a decline that came before a sharp rise that continued through 2020 and 2021.McGlone hinted that it's conceivable we're now witnessing a "similar price foundation forming now."
The analyst claimed that Bitcoin may be experiencing an uptrend due to its high crash rates and increased demand, acceptance, and regulation, an "inexorable phase of its migration into the mainstream and at a relatively discounted price."
