How Does the Perceived Security of a Network (Related to Difficulty) Influence Investor Confidence?

High mining difficulty and a large, stable hash rate signal a robust and secure network, which directly boosts investor confidence. It implies that the network is expensive to attack and that the history of transactions is highly immutable.

Conversely, a sharp, sustained drop in difficulty or hash rate can signal miner capitulation or a potential security vulnerability, leading to a loss of investor trust and price depreciation.