Why Does Bitcoin Hashrate Drop 10% After ATH?
Since its all-time peak, Bitcoin Mining Hashrate has dropped about 10%. What may be behind this tendency.
Bitcoin Mining Hashrate Has Dropped Sharply.
Miners' entire computer power linked to the Bitcoin network is shown by the “Mining Hashrate” indicator. The statistic is hashes per second (H/s) or, more literally, terahashes per second.
Miners naturally use this computational capacity to solve mathematical problems and compete to add the next block to BTC's Proof-of-Work (PoW) consensus mechanism.
Competing on the network this manner rewards the miner who contributes the next block with the block reward, a mix of transaction fees and block subsidies.
Thus, mining is only viable if the return exceeds the electrical cost of operating their facilities. Mining Hashrate trends indicate if miners are stressed or relaxed.
This indicator rises as new miners join the network or established ones grow. Such a tendency suggests chain validators find the blockchain profitable.
Unfortunately, the declining indicator signals that some miners no longer find BTC mining viable and have disconnected from the network.
The accompanying graph shows that the 7-day average Bitcoin Mining Hashrate reached a new high of 693 TH/s earlier in the month. After this high, the indicator dropped over 10% to 628 TH/s in a week.
Recent BTC price movement may explain this tendency. Miners make money from the block reward, which includes transaction fees and block subsidies.
The block subsidy is their main income source. The blockchain's block subsidy is set in BTC value and handed out at a certain time, thus the only variation is the coin's USD price.
BTC miners' income is closely related to BTC spot value. Since Bitcoin was dropping, the earlier hashrate rise to the ATH was unexpected.
Miners may have been counting on the price to rebound soon, but it hasn't, therefore they've disconnected some devices from the network, causing the 7-day average Hashrate to decrease so much.
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