3 reasons why the price of Bitcoin standard hashrate (BTCST) has risen by 50%

China’s Continued suppression In Bitcoin (Bitcoin) Mining led to the large-scale migration of mining operations out of the country and caused the Bitcoin network hash rate to drop by more than 50% from its historical high of 197.9 exahash/s (ehash/s) on April 15. Its current rate is 97 ehash/s.

The average hash rate of the Bitcoin network. source: Glass node

One token that is particularly affected by the decline in computing power is the Bitcoin Standard Computing Power Token (BTCST), which uses Bitcoin computing power as collateral, and each token represents 0.1 TH/s of Bitcoin mining power.

Data from Cointelegraph Markets Pro with Transaction view It shows that BTCST recently began to show signs of recovery after its price rose 57% from a low of 13.57 USD on July 18 to an intraday high of 27.38 USD on July 19, as the Bitcoin hash rate began to stabilize at 100 ehash/s nearby.

BTCST/USDT 4-hour chart. source: Transaction view

Three reasons for the recent rise in BTCST include: increased revenue due to the decline in the Bitcoin network hash rate, the ability to obtain rewards by staking BTCST, and an effective community governance system that can compensate users who have lost funds and act as a liquidity provider. ecosystem.

Bitcoin’s hash rate reversal

Although the decline in the BTC hash rate is widely regarded as negative, the BTCST ecosystem actually benefits from Difficulty of mining decreased The income that translates into each token increases.

Since each token represents 0.1 TH/s of Bitcoin mining power, due to the reduction of total computing power, the profitability of each token has increased by 34%, thereby providing more rewards for participants in the ecosystem .

Stakers can get BTC, BTCST and DOGE

The second reason for the growth of BTCST is that there are more and more opportunities to obtain income through collateral or providing liquidity.

Standard hash rate vault. Source: standard computing power dApp

As shown in the figure above, BTCST holders currently have the opportunity to pledge their tokens to earn rewards paid in BTCB, which is the BTC packaged version on Binance Smart Chain (BSC), or the native BTCST token.

The platform also includes options for staking or earning Dogecoin (DOGE), as shown above as DOGE or Tau DOGE (τDOGE), but at the time of writing, the APY provided is listed as 0%.

related: Malaysia is crushing thousands of illegal Bitcoin miners

Governance voting helps users recover losses

The third reason for the recent strength of BTCST is the recent adoption of STP 14, which is a one-time compensation plan for liquidity providers who have suffered losses due to recent “restorative adjustments”

Tau assets on the network include τBitcoin and τDOGE, which are mainly used as staking tokens to pay τDOGE rewards.

The adoption of a new governance proposal indicates that the project is trying to cope with the negative development of the ecosystem and the loss of user funds, but it remains to be seen whether the current rebound will find the momentum to continue to rise.

The views and opinions expressed here only represent the views of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading action involves risk, and you should conduct your own research when making a decision.