On-chain data shows the Bitcoin Hashrate has shot up to a new all-time high (ATH), despite the fact that BTC has continued its bearish trajectory.
7-Day Average Bitcoin Hashrate Has Just Set A New Record
The “Hashrate” refers to a metric that keeps track of the total amount of computing power that the miners as a whole have currently 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. Such a trend implies the chain is looking attractive to these chain validators.
On the other hand, the indicator observing a decline suggests some miners may be finding it hard to break even on BTC mining, which is why they are rolling back on their machines.
Now, here is a chart from Blockchain.com that shows the trend in the 7-day average value of the Bitcoin Hashrate over the past twelve months:
Looks like the value of the metric has been sharply rising in recent days | Source: Blockchain.com
As displayed in the above graph, the 7-day average Bitcoin Hashrate has been following a rapid upward trajectory recently, which suggests the miners have been in aggressive expansion mode.
The surge in the indicator is interesting for two reasons. First, the price of the cryptocurrency has been sliding down while the metric has been showing this trend.
Miners make the majority of their income through the block subsidy, a reward that they receive for solving each block on the network. This reward is fixed in BTC value and is given out at a nearly constant rate of time, so the only way miner revenue can go up is when the price of the asset itself rises.
As such, miners tend to expand when Bitcoin is going through a bullish phase. Recently, this hasn’t been the case, but the chain validators have seemingly remained bold enough to continue their upgrades regardless.
The second factor that makes the Hashrate uptrend curious is the latest explosion in the Difficulty to a new all-time high (ATH).
The value of the metric seems to have shot up during the past day | Source: CoinWarz
The “Difficulty” is a metric built into the Bitcoin blockchain that controls how ‘hard’ the miners would find it to mine blocks. This feature exists to limit the pace at which the miners can receive the block subsidy.
Whenever miners add Hashrate, they naturally become faster at their task and start receiving rewards at a faster than usual rate. To correct for this, the chain increases its Difficulty in the next biweekly adjustment.
As the Hashrate has been sharply going up recently, the network has once again taken this measure and has pushed its Difficulty to a new record. Miners haven’t cared, though, as they have still only continued to add more machines to the network, shoving off both this trend and the price crash.
BTC Price
At the time of writing, Bitcoin is floating around $78,600, down more than 5% in the last seven days.
The trend in the price of the asset over the last few days | Source: BTCUSDT on TradingView
Featured image from Dall-E, CoinWarz.com, Blockchain.com, chart from TradingView.com
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