Bitcoin maximalist Max Keiser predicts that the largest cryptocurrency will hit its price target of $220,000 this year.
Hash rate precedes price. New ATH hash means new ATH price incoming. $220k in 2022 in play. pic.twitter.com/Mq5yieGyji
— ☣️ BITCOIN MAXIMALIST 🇸🇻 (@maxkeiser) January 3, 2022
Keiser’s prediction is based on the old theory that the price of the top cryptocurrency tends to follow the network’s hash rate. As reported by KoinFinans, the Bitcoin hash rate hit an all-time high of 203.5 exahash on January 2 and started the new year with a record. The spike comes after falling as low as 58.4 exahash per second in late June due to the mass exodus of miners from China.
In an interview with the Daily Express, Keiser described the much-feared “Chinese ban” as a temporary hiccup. Now he says the fundamentals of Bitcoin are “screaming louder.”
Besides, the largest cryptocurrency is currently trading at $46,579 on the Bitstamp exchange and is struggling to regain its bullish momentum.
Is there a correlation?
The record-breaking hashrate numbers mean that damaging the network has become even more difficult and expensive. In other words, the high hash rate is very positive in terms of network security.
The theory that bitcoin price tends to follow the network’s hash rate is based on the assumption that the cryptocurrency tends to appreciate as miners invest more money and resources into the network. The higher level of security could be an attractive feature for long-term investors as they become increasingly confident that Bitcoin is protected.
A chart comparing bitcoin price and hash rate shows a clear correlation, while the hash rate is apparently a leading indicator.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.