Bitcoin mining hashrate has recovered 11% from its late-November low, according to data. Can the metric sustain this and set a new all-time high?
Bitcoin Mining Hashrate Continues to Rise, Approaching ATH
“mining hash rate” is a metric that measures the total amount of computational power currently connected to the Bitcoin blockchain. If this metric is rising, it means that miners are bringing more machines online on the network, indicating that they are currently attracted to the chain. It suggests that some miners are moving away from the blockchain. This is likely because we have not found the coin profitable enough to mine at the moment.
Here is a chart showing the average Bitcoin mining hashrate trend over the last 6 months over a 7-day period.
Looks like the metric's value has been rising in recent days | Source: Blockchain.com
As the graph above shows, the seven-day average Bitcoin hashrate hit an all-time high of 273 million terahashes per second (TH/s) at the beginning of November, but by the end of the month, the metric plummets to just 234 million TH/s. However, in December, the indicator shows a sharp recovery of about 11% as its value now rises to about 261 million TH/s.
The reason behind these changes in hashrate lies in the concept of difficulty in mining Bitcoin. processing) is almost constant. Naturally, any change in hashrate will cause this rate to deviate from the blockchain’s standard value. This is because after changing the hashrate, the miner owns a different amount of available computing power and therefore mines at a different speed.
To combat such deviations and bring the block production rate back to the chain’s desired constantmining difficultyThis makes it harder or easier (depending on the hashrate change) for miners to mine BTC. The graph below shows recent difficulty changes.
The indicator seems to have taken a large hit recently | Source: Blockchain.com
From the graph, it is clear that the difficulty set ATH at the same time as the highest hashrate. Since mining rewards are largely unchanged, higher difficulty for individual miners means smaller shares (because they are now split into larger hashrate pools).
Minor was already below immeasurable pressure In this bear market, the explosion in difficulty was enough to make some of them unprofitable to mine. Miners took the machine offline in the water. However, the hashrate suddenly dropped significantly, and the network had to respond by lowering the difficulty.
With this drop in difficulty, Bitcoin’s hashrate has started to rise again as miners take advantage of the higher margins. The metric is now approaching ATH. However, it is estimated that the next difficulty adjustment will come in about 3 days, so it is unknown if the metric will actually hit another high. This makes mining much more difficult again and limits hashrate growth just like last time. Increased difficulty.
BTC has already declined from the high | Source: BTCUSD on TradingView
As of this writing, Bitcoin’s price is hovering around $17,000, down 1% over the last week.