Bitcoin Price Tanks, But Miners Flex With Record Hashrate

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On-chain data shows the Bitcoin miners have pushed their Hashrate to a new all-time high (ATH) despite the plunge in the asset’s price.

7-Day Average Bitcoin Hashrate Has Shot Up Recently

The “Hashrate” is a Bitcoin indicator that keeps track of the total amount of computing power that the miners have connected to the network for the purpose of mining. This metric is measured in terms of hashes per second (H/s), or the more practical exahashes per second (EH/s).

When the value of the indicator rises, it means new miners are joining the blockchain and/or old ones are expanding their facilities. Such a trend implies the miners are finding the network to be profitable.

On the other hand, the metric going down suggests some miners are disconnecting their machines from the blockchain, potentially because they are no longer able to break even on BTC mining.

Now, here is a chart from Blockchain.com that shows how the 7-day average value of the Bitcoin Hashrate has changed over the past year:

The 7-day average value of the metric appears to have sharply been going up in recent days | Source: Blockchain.com

As displayed in the above graph, the Bitcoin Hashrate registered a steep climb earlier in the month and set a new record of 1,045 EH/s on September 12th. With the extra computing power, miners started mining blocks at a notably faster pace than usual.

There exists a rule on the BTC network, however, that the block time should stay constant at 10 minutes. To ensure that this is followed, Satoshi built the “Difficulty” into the blockchain, a metric that controls how hard miners would find it to mine on the chain. The network automatically changes its Difficulty in biweekly adjustments to correct for increases or decreases in the Hashrate.

In response to the earlier rise in the indicator, the Bitcoin blockchain significantly increased its Difficulty. From the chart, it’s visible that this led to a plunge in the Hashrate, as miners not able to cope with the harder Difficulty dropped out.

Interestingly, though, it didn’t take long for miners to resume expansion. In fact, not only have they started expanding again, they have been doing so at an explosive pace during the last few days.

This has resulted in a fresh ATH of 1,079 EH/s. The growth in the Hashrate has come despite the fact that the Bitcoin price has observed a plummet toward the $112,000 level.

Generally, miners expand or decommission their facilities depending on the price trend, as the asset’s USD value directly impacts the value of their mining rewards. It would appear, though, that miners are this time betting in advance on the cryptocurrency’s trajectory reversing in the near future. It only remains to be seen whether the gamble will work out.

BTC Price

At the time of writing, Bitcoin is floating around $112,200, down around 2.5% over the last seven days.

Looks like the price of the coin has gone down recently | Source: BTCUSDT on TradingView

Featured image from Dall-E, Blockchain.com, chart from TradingView.com

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