On-chain data shows the Bitcoin mining hashrate has stayed near the all-time high (ATH) recently despite the plunge BTC’s price has seen.
7-Day Average Bitcoin Mining Hashrate Still Has A High Value
The “mining hashrate” refers to an indicator that keeps track of the total amount of computing power that the miners as a whole have connected to the Bitcoin blockchain.
When the value of this metric goes up, it means new miners are joining the network and/or old ones are expanding their facilities. This kind of trend implies these chain validators are finding the blockchain lucrative.
On the other hand, the indicator observing a decline suggests some of the miners have decided to disconnect their machines, likely because they are no longer finding BTC mining profitable.
Now, here is a chart from Blockchain.com that shows how the 7-day average Bitcoin mining hashrate has changed over the past year:
The 7-day average value of the metric appears to have been climbing up in recent months | Source: Blockchain.com
As displayed in the above graph, the 7-day average Bitcoin mining hashrate set an ATH back on the 15th of this month. BTC hit its top a couple of days after that and has since been following an overall downward trajectory.
The indicator has also declined during this period, but interestingly, the drawdown has only been slight in its case. At the ATH, the hashrate measured around 801 terahashes per second (TH/s), while today it stands at 788 TH/s, implying a decrease of just 1.5%.
Generally, the price of the cryptocurrency tends to be a big factor in the revenue of BTC miners, so the mining hashrate trend also tends to follow the price action.
This dependency comes from the fact that the block subsidy, a BTC reward that validators receive as compensation for solving blocks, remains fixed in BTC value and is given out at a more or less constant rate of time, leaving only the price as the variable attached to it.
Thus, given this relationship, it’s interesting that the hashrate didn’t plunge during the recent price crash. The price hasn’t been the only factor tightening the revenue of the miners recently, either, as the mining difficulty has also been sitting at a record value.
Looks like the value of the metric has shot up recently | Source: Blockchain.com
The mining difficulty is a feature built into the Bitcoin blockchain that controls how hard miners would find it to mine the cryptocurrency at any given point. As mentioned earlier, the block subsidy is given out at a nearly constant rate of time. The only reason this is possible is thanks to the existence of the difficulty.
Whenever miners increase the hashrate, they become faster at their task and, thus, produce blocks at a faster pace. To counteract this, the network increases the difficulty in the next biweekly adjustment, bringing the miners back to the standard pace of 10 minutes per block.
A consequence of this is that no matter how many miners join the network, the total reward pool always stays the same. So, with the hashrate sitting near an ATH and the coin being harder to mine than ever before, the revenue of individual miners must be quite constrained indeed.
Despite these conditions, the Bitcoin miners have still not decided to scale back on their operations, which suggests they are expecting the bullish momentum to make a return.
BTC Price
At the time of writing, Bitcoin is floating around $95,200, down more than 11% over the last week.
The price of the coin has been following a bearish trajectory during the last few days | Source: BTCUSDT on TradingView
