On-chain data shows the 7-day average Bitcoin Hashrate has shot up to a new all-time high (ATH) despite network Difficulty being at a record level.
Bitcoin Mining Hashrate Has Seen A Sharp Increase Recently
The “Hashrate” refers to a Bitcoin indicator that keeps track of the total amount of computing power that the miners as a whole have connected to the BTC blockchain. The metric is useful for gauging the sentiment among these chain validators.
When the value of the Hashrate goes up, it means new miners are joining the network and/or old ones are expanding their farms. Such a trend implies BTC mining is looking profitable to this cohort.
On the other hand, the indicator witnessing a decline suggests some of the miners have decided to pull out of the chain, potentially because they are no longer able to pay off electricity bills.
Now, here is a chart from Blockchain.com that shows how the 7-day average Bitcoin Hashrate has changed over the past year:
Looks like the value of the metric has shot up in recent days | Source: Blockchain.com
As displayed in the above graph, the 7-day average Bitcoin Hashrate has seen a sharp surge recently and has set a new all-time high (ATH) of around 1.03 zettahashes per second (ZH/s). This increase in the metric has come as the price of the cryptocurrency has made some recovery.
Miners depend on the asset’s price for their revenue, so bullish price action allows them to expand. Though, while price conditions may have been favorable in the past week, another factor hasn’t been. Namely, the Difficulty.
The Difficulty is a feature built into the Bitcoin blockchain that controls how hard the miners would find their task of BTC mining on the network right now. This metric’s value automatically changes about every two weeks based on network conditions.
More specifically, the Difficulty adjusts according to whether the miners have been slower or faster than the network target rate of 10 minutes per block. The chain ups the metric if miners are going through the average block in less than 10 minutes, while it lowers it if the validators aren’t able to keep pace.
Prior to the latest adjustment, Bitcoin miners were aggressively expanding their Hashrate, becoming significantly faster than the network wants them to be. The chain responded with a notable Difficulty increase that took the metric to a new record of 136.04 terahashes, as data from CoinWarz shows.
The Difficulty adjustments that have occurred over the last three months | Source: CoinWarz
Difficulty increases can squeeze the revenue of the most vulnerable miners, so Hashrate often dips following them. And indeed, the same occurred after the latest adjustment as well, but the drop was temporary.
Thus, it would appear that the spike in Difficulty hasn’t been able to scare away the Bitcoin miners this time.
BTC Price
At the time of writing, Bitcoin is floating around $116,400, up almost 5% in the last seven days.
The trend in the price of the coin over the last five days | Source: BTCUSDT on TradingView
Featured image from Dall-E, CoinWarz.com, Blockchain.com, chart from TradingView.com
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