Emily Walker
Recent on-chain data reveals that Bitcoin’s Hashrate has increased, suggesting that miners are expanding their operations.
Bitcoin Mining Hashrate Approaches Record Levels
The term “Hashrate” represents the total computing power of miners connected to the Bitcoin blockchain. This measure helps gauge the overall sentiment of those validating transactions on the network.
A rise in Hashrate indicates new miners are entering the network, or existing miners are enhancing their setups, reflecting a positive outlook on Bitcoin’s profitability. Conversely, a decline in this metric suggests some miners are exiting, likely due to challenges in achieving a break-even point.
The following chart illustrates the 7-day average of Bitcoin’s Hashrate over the past year:
As seen in the chart, Bitcoin’s Hashrate significantly increased last month, reaching a new all-time high (ATH). This surge occurred alongside a rise in Bitcoin’s price, which is crucial for miners as their revenue relies heavily on market conditions.
Miners earn revenue through two primary means: block subsidies, which are rewards for validating transactions, and transaction fees paid by users for each transfer. Historically, the majority of miner income has come from block subsidies rather than transaction fees. An analysis by Glassnode highlights this trend in their latest report.
The graph displays the overall revenue of Bitcoin miners, represented in yellow (combined block subsidies and transaction fees), with transaction fees shown in red. Throughout Bitcoin’s history, miners have earned a total of $71.5 billion, with only $4.2 billion derived from transaction fees.
Notably, the block subsidy remains constant in Bitcoin value, aside from designated Halving events, which reduce the reward by half every four years. Therefore, fluctuations in miners’ revenue are largely tied to Bitcoin’s USD price.
Interestingly, while Bitcoin’s price continued to rise past last month’s peak, the 7-day Hashrate began to decline. However, there seems to be a shift as the Hashrate has recently started to rise again, aiming to reach new highs.
Bitcoin Price Update
Bitcoin’s price is also on an upward trend, recently surpassing the $102,000 mark, indicating a potential return to its all-time high.