Hashrate Valuation Risk

Hashrate Valuation Risk reads the cycle from the network's physical side. Miners deploy hardware after price rises and keep sunk machines running through bear markets, so the ratio of market cap to hash rate swings around the cycle: stretched when price outruns the mining base, depressed when the base keeps growing into a drawdown. It is the only chart on the site whose reference point is a real-world resource cost rather than price history or on-chain cost basis.

Divide market cap by network hash rate, average over 7 days, standardize against the ratio's own trailing 2-year baseline, and normalize the signed result onto the 0–1 risk scale over the full history from mid-2010.

High readings mark price running far ahead of deployed mining power, the condition at the 2013, 2017, and 2021 tops; low readings mark hash rate still compounding through a drawdown. Two honest limits: before 2013 the CPU-to-GPU hardware race swamps the ratio, so the 2011 top reads flat, and the ratio cooled between the two 2013 peaks as the first ASICs came online.

The reading pegged 1.0 at the April 2013 and December 2017 tops, read the two 2021 peaks at 0.83 and 0.60, and dropped below 0.12 at the 2018, 2020, and 2022 lows. The 2026 drawdown printed its lowest readings on record, with industrial-scale mining growth since the ETFs deepening the cheap band.