On-chain data shows that the Bitcoin Mining Hashrate has remained at its recent lows, indicating that miners may not have confidence in the coin’s rally.
Bitcoin Mining Hashrate has been moving sideways around lows lately
The “Mining hashrate‘ refers to a metric that tracks the total computing power that miners currently have associated with the Bitcoin network. Its value is traditionally measured in hashes per second (H/s), but today larger units such as terahashes per second (TH/s) are used instead as they are more practical.
When the value of this metric increases, it means that new miners are joining the network and old ones are expanding their facilities. Such a trend implies that these chain validators now find blockchain attractive.
On the other hand, the indicator registering a decline implies that some miners have decided to disconnect from the network, possibly because they feel that BTC mining is not profitable.
Here is a chart showing the trend in the seven-day average Bitcoin Mining Hashrate over the past year:
Looks like the 7-day average value of the metric has been moving sideways in recent days | Source: Blockchain.com
As visible in the chart above, the Bitcoin Mining Hashrate had risen to a new all-time high (ATH) earlier this month, but it didn’t take long for the indicator to fall back to the same lows as in August.
A possible reason for this may have been the fact that the increase in hashrate to the ATH was unsustainable due to the corresponding action in BTC’s spot value.
Miners mainly make them income Through block subsidies and transaction costs. Of the two, the first represents the majority of their revenue.
A feature of the BTC blockchain is that the block grant always remains fixed (except during a special event called the Halvingwhich halves its value every four years) and is also issued at an almost constant pace. So the only variable related to that is the BTC price.
Since the Bitcoin block subsidy corresponds to the majority of miners’ revenues, this relationship means that revenues are highly dependent on the value of the asset.
Previously, when the Hashrate had risen to the ATH, the BTC price had fallen instead. The revenue decline could be why the miners decided to roll back their upgrades.
Interestingly, the price of the asset has recently risen, but the Hashrate has continued to hover around the same lows since then. Maybe the miners are trying to be more cautious this time or are not optimistic about Bitcoin.
Be that as it may, miners’ concerns may be starting to be confirmed by the latest pullback the cryptocurrency has seen.
BTC price
At the time of writing, Bitcoin is trading around $63,300, down almost 4% in the past 24 hours.
The price of the coin appears to have plunged over the past day | Source: BTCUSDT on TradingView
Featured image from Dall-E, Blockchain.com, chart from TradingView.com