New Mining Difficulty Metric Points to $31K Bitcoin Price by 2021
New estimates predict a 1,000% increase in price versus the last difficulty low, which was $3,100 in December 2018.
Published by well-known analyst PlanB on Sept. 10, the statistics combine Bitcoin price as a percentage of difficulty lows, along with the number of blocks since the last low.
The difficulty is a measure of how difficult it is to find a hash below a given target. Simply put, it measures the complexity of the equations miners must solve in order to validate blocks of Bitcoin transactions.
It can act as a measure of how much competition there is among Bitcoin miners to find the next block, as the higher the competition, the more incentive for the difficulty to increase.
Bitcoin to hit $31,000 if the trend continues
According to PlanB, Bitcoin has seen several difficulty cycles in its history, each time price rising an order of magnitude less relative to the last difficulty low.
The stabilization means that in late 2013, Bitcoin’s price high of $1,300 represented a 50,000% increase versus the last difficulty low. In late 2017 meanwhile, its rise to $20,000 was a jump of around 9,000%.
Bitcoin price as a % of its value at mining difficulty low. Source: PlanB
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According to the model, the next peak will be lower still -— at around 1,000% or roughly $31,000 by 2021. When difficulty last hit a floor in December 2018, BTC/USD traded at $3,100.
“Wee baby bull market,” fellow Bitcoin social media personality Parabolic Trav commented on the findings.
As Cointelegraph continues to report, Bitcoin’s technical prowess has become increasingly at odds with its price. While aspects such as hash rate keep hitting record highs, the price has stayed sideways, failing to capitalize on a bull market which began in earnest in April.