TL;DR
- Bitcoin’s hash rate reached a record 62 quintillion hashes per second in late August 2018
- The network’s computational power grew by more than 50% during August alone
- SEC trading suspensions for fraudulent crypto companies highlighted growing enforcement activity
- Bitcoin held above $7,000, demonstrating resilience despite regulatory headwinds
- SEC Commissioner Hester Peirce emerged as a leading voice for crypto-inclusive regulation
While the cryptocurrency market endured a grueling bear cycle through the summer of 2018, the Bitcoin network itself was quietly achieving milestones that told a very different story. On August 29, data from Blockchain.com confirmed that Bitcoin’s hash rate had reached an unprecedented 62 quintillion hashes per second — a figure that represented not just a technical achievement but a powerful statement about the long-term health and security of the world’s largest blockchain network.
A 50% Surge in a Single Month
The hash rate milestone was particularly remarkable given the broader market context. Bitcoin had fallen from its December 2017 peak near $20,000 to roughly $7,047 by late August 2018 — a decline of approximately 65%. Yet during that same period of declining prices, the network’s computational power continued to climb relentlessly. The 62 quintillion figure represented a gain of more than 50% during August alone, a clear signal that mining operations were not just maintaining their positions but actively expanding.
This divergence between price and hash rate is one of the most closely watched metrics in the cryptocurrency space. When hash rate continues to rise during a bear market, it indicates that miners — who must make significant capital investments in hardware and electricity — are making long-term bets on the network’s viability. The August 2018 numbers suggested that the industry’s most informed participants saw the bear market as a temporary setback rather than a terminal decline.
SEC Ramps Up Enforcement Activity
The growing hash rate stood in stark contrast to the increasingly active regulatory environment in the United States. In August 2018, the SEC suspended trading in securities of a Nevada-based company that had issued false press releases about partnerships with a claimed SEC-qualified custodian for cryptocurrency transactions. The suspension highlighted the Commission’s willingness to use its existing enforcement tools to crack down on crypto-related fraud, even as it continued to deliberate on broader questions about how to regulate digital assets.
The enforcement action was part of a broader pattern. Throughout the summer of 2018, the SEC had been steadily increasing its scrutiny of cryptocurrency projects, particularly those making unrealistic claims about regulatory approval or institutional partnerships. The message was clear: while the SEC might not yet be ready to approve a bitcoin ETF, it was absolutely ready to punish companies that misrepresented their regulatory status to investors.
Commissioner Peirce Charts a Different Course
Amid the enforcement actions and ETF rejections, one voice within the SEC was carving out a distinctly more crypto-friendly position. Commissioner Hester M. Pierce, who had dissented from the Commission’s July rejection of the Winklevoss Bitcoin Trust ETF, was emerging as a prominent advocate for a more open regulatory approach. Her dissent argued that the SEC’s refusal to approve regulated crypto investment products was counterproductive, noting that institutional participation would actually improve market quality and reduce the manipulation risks the Commission cited as grounds for rejection.
Peirce’s stance was significant because it represented the first serious challenge within the SEC to what had been a consistently cautious approach to digital assets. Her arguments would eventually influence a broader shift in regulatory thinking, though the full impact would not become apparent for several years.
Fed Chair Powell Dismisses Systemic Risk Concerns
The regulatory landscape in August 2018 was further shaped by comments from Federal Reserve Chairman Jerome Powell, who stated in July that the cryptocurrency market was simply not large enough to pose a systemic risk to the broader financial system. With bitcoin’s market capitalization at approximately $121 billion and the total crypto market at roughly $232 billion, Powell noted that digital assets did not yet meaningfully impact the traditional financial system and therefore did not warrant active oversight from the Federal Reserve.
Powell’s position effectively drew a boundary line: the Fed would monitor crypto developments but had no intention of taking an active regulatory role. This left the primary oversight responsibilities with the SEC for securities-related matters and the CFTC for commodities and derivatives — a division of labor that would persist and shape the regulatory framework for years.
Market Resilience Despite Headwinds
Through all the regulatory maneuvering, the cryptocurrency market demonstrated notable resilience on August 29. Bitcoin maintained its position above $7,000 after briefly touching $7,100 the previous day. The total market capitalization stood at approximately $232 billion, with bitcoin commanding a dominant 53% share. Among the top altcoins, EOS posted the strongest performance with a gain of roughly 15%, while Ethereum continued its gradual climb toward the $300 level, trading at approximately $289.
Bitcoin Cash also showed strength, rising about 2% to the $554 level, while XRP maintained its recent gains around $0.34. The broad-based stability across major cryptocurrencies suggested that the market had found a degree of equilibrium after months of decline, even as regulatory uncertainty continued to loom.
Why This Matters
The events of August 29, 2018, encapsulated a fundamental tension that would define the cryptocurrency industry for years: the gap between the technology’s rapid maturation and the regulatory framework’s slow evolution. Bitcoin’s hash rate hitting 62 quintillion was concrete evidence that the network was stronger and more secure than ever, while the SEC’s enforcement actions and ETF rejections showed that regulators were still grappling with how to approach this new asset class. Commissioner Peirce’s dissent represented a crack in the regulatory wall that would eventually widen, and the CFA Institute’s decision to incorporate crypto into its curriculum signaled that mainstream finance was beginning to take digital assets seriously as a permanent feature of the financial landscape. For investors and industry participants, the lesson was clear: fundamentals were strengthening even as prices fell, and the regulatory clarity everyone sought would come — just not as quickly as anyone hoped.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always do your own research before making investment decisions.