On-chain data shows that the Bitcoin Hashrate reached an all-time high as the coin’s price continued to explore new all-time highs (ATH).
The 7-day average Bitcoin mining hashrate has recently increased
“Hashrate” refers to a metric that tracks the total amount of computing power that Bitcoin miners as a whole currently have connected to the network. Its value is measured in larger and more practical units of hashes per second (H/s), or terahashes per second (TH/s).
Miners use their computing power to solve certain mathematical puzzles, with the reward being the ability to add the next block to the chain. At no point, however, does the collective computing power connected to the network work in tandem.
Instead, miners compete using their individual Hashrate to be the first to solve these puzzles and receive the compensation. Despite this, the “total” Hashrate remains a useful indicator, as it provides insight into the situation of these validators as a whole.
When the value of this metric increases, it means that miners are connecting additional power to the network. Such a trend suggests that this group views BTC mining as a profitable business.
On the other hand, the decline in the indicator implies that some miners have decided to leave the blockchain, potentially because they are no longer generating positive yield.
Now here is a chart that shows the 7-day average Bitcoin hash rate trend over the past year:
The 7-day average value of the metric appears to have been going up in recent days | Source: Blockchain.com
As seen in the chart above, the 7-day average Bitcoin hash rate has recently observed a rapid rise, implying that miners have been expanding their facilities.
At the start of the month, the metric had set a new record high of 755 TH/s, but even though the cryptocurrency had reached new highs in the following weeks, the metric had instead recorded a decline.
Bitcoin miners earn their revenue from two sources, transaction fees and block subsidy, but the latter typically contributes the vast majority of their revenue, so the former can be ignored when trying to assess profitability minors.
The global subsidy remains fixed in BTC value (except during Halvings, events which occur approximately every four years when it is permanently reduced by half) and is distributed at an almost constant rate of time. As such, the only way miners’ earnings can change is when the price of BTC itself changes.
Bullish periods naturally lead to higher profitability for these chain validators, so they tend to invest more in their farms. This is why the trend observed at the start of the month was surprising.
Miners may not have been too confident about the uptrend at the time, but with the latest price rally near the $100,000 level, Hashrate appears to be back on track, signaling that this cohort joined the rally.
Following the latest increase, the 7-day average Bitcoin hash rate reached a new all-time high of over 768 TH/s.
BTC Price
At the time of writing, Bitcoin is floating around $98,000, up more than 9% from last week.
Looks like the price of the coin has been marching up over the last few days | Source: BTCUSDT on TradingView
Featured image of Dall-E, Blockchain.com, chart from TradingView.com
