Despite the halving occurring just under five months ago, Bitcoin’s hashrate has just recorded a new all time high (ATH).
The thing in theory is anomalous, because with the halving the rewards for the miners, that is their main source of income, have been suddenly and definitively halved.
The new ATH (all time high) of Bitcoin’s hashrate
The new ATH of Bitcoin’s hashrate was recorded today at 737 Eh/s.
Bitcoin Hashrate hits a new all-time high of 737 EH/s 
pic.twitter.com/oXTO7738RJ
— Bitcoin News (@BitcoinNewsCom) September 3, 2024
However, according to the hourly estimates by CoinWarz, today they even reached 793 Eh/s, although only for a brief moment. As for the hourly estimates, the absolute record is still the 797 Eh/s of Friday, August 23.
It should be noted that the pre-halving peak was 736, and in April, a few days after the halving, another record was recorded at 751.
Considering instead the daily estimates from BitInfoCharts, the previous record was on July 23, when 754 Eh/s were surpassed. On BitInfoCharts, today’s daily estimate has not yet been published, and we will have to wait until tomorrow to see it.
Note that these are only estimates, and in fact, they vary depending on who makes them.
The progression
Since these are only estimates, to better analyze the trend in the medium/long term, it is advisable to use the weekly averages of Hashrate Index. Even in this case, today’s data is not yet available.
Until the halving in April, the growth had been almost continuous, since 2021.
The highest weekly average was reached precisely on April 20 itself at 650 Eh/s.
Subsequently, there was a sharp decline, as a result of the halving, which ended on June 29 at 556 Eh/s.
It should be remembered that the amount of hashrate used for Bitcoin mining depends solely and exclusively on the free and arbitrary decisions of the miners, so it is they who make it rise or fall.
For the Bitcoin protocol, it is not important how much hashrate is committed to mining, because with the automatic adjustment of the difficulty, a block is generally mined every approximately 10 minutes.
The fact is that mining is a competition where the winner is the one with the highest hashrate. Therefore, it is advantageous for miners to keep it as high as possible. However, since mining is an economic activity, miners cannot afford to do it at a loss, so every time costs rise too much, they are forced to reduce the hashrate.
The reduction of the hashrate
And so, as widely expected, after the halving that suddenly halved the reward for the miners who mine the blocks, the revenues for the miners themselves have been greatly reduced. Forcing them to reduce expenses by turning off the less efficient machines.
This resulted in a reduction of the hashrate, from the 650 Eh/s weekly average to 556 Eh/s.
What was not expected at all, however, was a sort of “rimbalzo”.
In fact, already at the end of July, a new all-time high above 677 Eh/s was recorded.
It is very difficult to understand why the miner have allocated more hashrate to Bitcoin mining despite the halving of the rewards. Also because the market value of BTC has not risen since then.
The inevitable consequence of all this, given that revenues remain low, is a sharp reduction in earnings.
The impact on the price
At this moment, in the face of a reduction in revenues that cannot be changed, the only way to sustain the high costs of this level of halving so high is to sell BTC accumulated in the past.
So if on one hand the halving has significantly reduced the number of BTC that miners earn and sell, at this moment the same miners are probably selling more BTC than they are earning. This is because they are depleting their reserves, accumulated over the years, to cope with the high costs of such a high hashrate.
All this is keeping the selling pressure on Bitcoin higher than hoped.
Generally, after the halving, the sharp reduction in revenues implies that sooner or later some miner will have to close. At this moment, it seems that the miners are trying to hold on as long as possible precisely to avoid closing. But this situation is not destined to last long.
When the BTC reserves accumulated over the years inevitably run out, some miners will be forced to shut down due to lack of profitability, if the hashrate remains high. The capitulation of some miners will actually save the sector, and here miners who will not have been forced to shut down, because as competition decreases, the hashrate and costs will also decrease.
No problem for Bitcoin
It should be remembered that all this only impacts the survival of some miners (not all), and possibly the price of BTC. However, it does not affect the Bitcoin protocol, which will continue to function as always.
In fact, the difficulty, which updates automatically approximately every two weeks, ensures that in the face of any reduction in hashrate, the block-time of Bitcoin always remains around 10 minutes. This way, the number of validated transactions remains essentially the same.
Furthermore, the problems mentioned above are always by their very nature only temporary, and are destined to resolve themselves, although not without causing damage. Such damage, however, is only borne by miners who have too high costs, and by those who might sell BTC at a low price before the capitulation of the less efficient miners.
