Bitcoin bubble

btc-bubble

After China’s recent restrictions on cryptocurrency mining, because of concerns over the electrical energy consumption, computational power on the blockchain (Bitcoin hashrate), that is used for secure transactions has dropped to the lowest level this year. The hash rate dropped about 27% of the all time high, which means that this could increase the possibility of hacker attacks. It is predicted that this is only temporary decrease because most of the mining equipment will be relocated and used again.

Even after the bitcoins price crash of about 35% in May many fund managers think that BTC is still in a bubble. Meanwhile the bitcoin price is stabilized and steadily increasing which was helped by Tesla CEO Elon Musk, who said that Tesla will resume bitcoin transactions after the miners reach environmental standards. Also El Salvador decided to use BTC as trading currency which will stabile the price further.

Dominance rate is the cryptocurrency’s share in the total market capitalization. In January BTC had dominace rate of 70%, but after the crush it is less then 50%. Many experts predict that it is natural BTC to reach 50% or even more.

All the signs are showing that BTC is back on its tracks, but only time will tell if the BTC bubble will burst.