The data shows that Bitcoin Hashrate has been rising rapidly recently, which is an indication that miners are expecting the recent commodity rally to continue.
The 7-Day Bitcoin Hashrate Average Has Been Testing New Highs Recently
According to data from Blockchain.com, the BTC network has seen its Hashrate shoot up recently. “Hashrate” here refers to an index that keeps track of the total amount of computing power that miners have contributed to the Bitcoin blockchain.
If the value of this metric sees an increase, it means that new miners are joining the network, and old ones are expanding their farms. Such trends mean that the chain looks like a profitable business for these chain endorsers.
On the other hand, the downward trend suggests that some miners have decided to disconnect their rigs from the network, possibly because they no longer find BTC mining attractive.
Now, here is a chart showing the trend of the 7-day average Bitcoin Hashrate over the past year:
The 7-day average value of the metric appears to have seen a rapid increase in recent days | Source: Blockchain.com
As shown in the graph above, the 7-day average of Bitcoin Hashrate has seen a sharp increase over the past few weeks and set a new all-time high (ATH).
The metric is traditionally measured in terms of horses per second (H/s), but at this point, the BTC network has grown so much that much larger terahashes per second (TH/s) are used instead. The latest ATH for the index is around 735 TH/s, about 6% higher than the record 694 TH/s set earlier in the month.
The rapid growth seen by Hashrate recently suggests that miners have been confident in the cryptocurrency. It is interesting that these chain validators have made these extensions even though the Network Difficulty has seen an increase in recent corrections.
As data from CoinWarz shows, this increase in difficulty was the second in a row that the chain has gone through.
The trend in the Difficulty over the last few weeks | Source: CoinWarz
“Difficulty” refers to a feature of the Bitcoin blockchain that controls how hard miners can find BTC mining. The difficulty lies in limiting the rate at which miners receive block grants, which serve as the only way to generate new BTC, so commodity inflation can be controlled by limiting it.
Whenever miners increase their Hashrate, they temporarily speed up their work and receive block grants at a faster rate. To counter this, the network raises its difficulty in the next two-week adjustment, to restore the miners to the desired speed.
This means that no matter how much money the miners make, they will not be able to earn more than they did before. The only way the extension pays is if the price of BTC goes up as the value of their BTC rewards can also increase naturally.
Given the aggressive increase in Hashrate recently, despite the difficulty of setting new records, it seems that miners believe that the current rally will continue.
BTC price
Bitcoin broke above $69,000 earlier today, but the asset seems to have seen a reversal as its price has now dropped to $68,700.
Looks like the price of the coin has surged during the last 24 hours | Source: BTCUSDT on TradingView
Featured image from Dall-E, CoinWarz.com, Blockchain.com, chart from TradingView.com
Source link