Data shows the Bitcoin hashrate has stopped its uptrend recently, a sign that miners have become hesitant about growing their facilities further.
Bitcoin Mining Hashrate Has Started Moving Sideways Recently
The “mining hashrate” here is a measure of the total amount of computing power that the Bitcoin miners have connected to the network. This metric may also serve as an indication of how secure the blockchain is, as the probability of a 51% hack to be successful goes down as the number of mining rigs goes up.
When the hashrate’s value increase, it can mean that new miners are joining the blockchain and/or existing miners are connecting more machines right now. This trend could suggest that these chain validators are finding the chain attractive to mine currently.
On the other hand, lower values of the indicator may be a sign that some of the miners are finding it unprofitable to validate on the BTC network, so they are disconnecting from the chain.
Now, here is a chart that shows the trend in the 7-day average Bitcoin mining hashrate over the past year:
Looks like the value of the metric has stagnated in recent days | Source: Blockchain.com
As displayed in the above graph, the Bitcoin mining hashrate had been climbing up since the start of the year, until very recently. During this period, the price of the cryptocurrency has observed a rally, so it makes sense that the miners have been expanding their facilities in order to capitalize on the higher revenues.
While the block rewards of the miners stay nearly constant no matter what (except for halving events, during which they are permanently cut in half), their USD value does shift with changes in the BTC price.
The miners depend on the USD value of their rewards as they generally pay their running costs like electricity bills in fiat. Thus, when the cryptocurrency’s price goes up, so does the effective revenue of these chain validators.
The increase in the 7-day mining hashrate had slowed down a bit when Bitcoin was struggling following the local top in April, as their revenues had declined. When the latest leg in the rally above the $30,000 mark had happened, though, the metric had naturally again picked back up.
But as BTC has continued to endlessly consolidate around this level during the past few weeks, the metric’s value has again slumped to sideways movement. This may suggest that the miners are currently not interested in expanding their operations further.
This hesitancy to invest further into their facilities may be coming from the fact that the asset is in an uncertain spot at the moment, as it has been unable to pick any direction.
It now remains to be seen, if the mining hashrate will budge from its sideways trend when Bitcoin would eventually break out of its consolidation.
BTC Price
At the time of writing, Bitcoin is trading around $30,000, down 2% in the last week.
BTC has gone down during the past few days | Source: BTCUSD on TradingView