Recent developments in Bitcoin have raised concerns about the concentration of mining power that could threaten the network's security. Two mining pools now control over 51% of Bitcoin's hashrate.
Historical Precedent Raises Alarm
Two mining pools now control over 51% of Bitcoin's hashrate, creating potential conditions for a 51% attack. Jacob King, CEO of WhaleWire, disclosed these figures in a social media post, noting that such control could allow attackers to reverse transactions or halt network operations. This situation mirrors events from 2014 when the mining pool GHash.io also gained similar control. That incident triggered widespread concern within the cryptocurrency community and led to an over 87% price drop.
Market Impact and Investor Response
King suggested the mining concentration could serve as a catalyst for a significant market correction. Over-the-counter trading data indicates that large Bitcoin holders are already repositioning their investments in anticipation of potential market disruptions. WhaleWire's executive specifically referenced Michael Saylor, whose company MicroStrategy holds substantial Bitcoin reserves, suggesting even prominent Bitcoin advocates may be reconsidering their positions.
Technical Analysis and Price Projections
Market analyst Fiege_max estimated an 85% probability that Bitcoin peaked at $123,000. He advised traders to establish exit strategies as market conditions shift from an easier trading environment to a more challenging one. Fiege_max noted the current period is distinct from earlier cycles as alternative cryptocurrencies have not broadly rallied.
The concentration of Bitcoin mining power in two pools has revived concerns about network decentralization. Industry observers are monitoring whether this will trigger a market reaction similar to the significant downturn following the previous centralization crisis.
