Bitcoin Hashrate Reaches New Peak as BTC Approaches $100,000

Based on on-chain data, Bitcoin’s hashrate is now at an all-time high, coinciding with the cryptocurrency’s price hitting unprecedented levels.

Recent Spike in 7-Day Average Bitcoin Mining Hashrate

The term "hashrate" measures the total computing power miners are currently using on the Bitcoin network. It’s quantified in hashes per second (H/s), though more commonly expressed in terahashes per second (TH/s) for practicality.

Miners leverage this computing power to solve mathematical puzzles, aiming for the reward of adding the next block to the blockchain. It’s important to note that this computing power doesn’t collaborate; instead, miners compete individually to crack these puzzles first for rewards. Despite this competitive nature, observing the overall hashrate provides valuable insight into the collective state of these network validators.

A rising hashrate indicates that more computing power is being directed into the network, often a sign that miners find Bitcoin mining profitable. Conversely, a decrease would imply some miners are dropping out due to non-viability in returns.

Now, let’s take a look at the recent trend in Bitcoin’s 7-day average hashrate over the past year:

As the chart above illustrates, there has been a noticeable surge in the 7-day average Bitcoin hashrate, implying an expansion in mining operations.

At the beginning of the month, this metric hit a new high of 755 TH/s. Despite Bitcoin’s price reaching new heights shortly after, the hashrate unexpectedly dipped.

Miners primarily earn from the block subsidy, as transaction fees contribute minimally to their revenue, which we can set aside when assessing profitability.

The block subsidy remains constant in terms of Bitcoin, altered only by Halvings—which cut it in half approximately every four years—and is distributed at a steady rate. Thus, miner revenue is directly tied to changes in Bitcoin’s price.

Bull markets generally boost miner profitability, motivating reinvestment in their operations. That’s why the earlier dip was somewhat unexpected. Miners seemed wary during the initial stages of the rally, but the recent surge to nearly $100,000 seems to have affirmed their confidence, as reflected in the increased hashrate.

Now, this average hashrate has hit a fresh record, surpassing 768 TH/s.