The data shows that the Bitcoin hashrate has stopped its upward trend recently, a sign that miners have become hesitant about further growth of their facilities.
The Bitcoin mining boom has started to move sideways recently
The “mining hashrate” here is a measure of the total amount of computing power that Bitcoin miners have connected to the network. This metric can also serve as an indicator of how secure the blockchain is, as the probability of a 51% hack being successful decreases as the number of mining rigs increases.
When the hashrate value increases, it may mean that new miners are joining the blockchain and/or existing miners are connecting more machines now. This trend may suggest that these chain validators are currently finding the chain attractive to mine.
On the other hand, lower indicator values could be a sign that some of the miners are finding verification on the BTC network useless, so they are disconnecting from the chain.
Now, here is a graph showing the trend in the average 7-day hashrate of Bitcoin mining over the past year:
Looks like the value of the metric has stagnated in recent days | Source: Blockchain.com
As shown in the chart above, Bitcoin mining hashrate had been increasing since the beginning of the year, until recently. During this period, the price of the cryptocurrency has seen growth, so it makes sense that miners have expanded their facilities to capitalize on higher revenues.
While miners’ block rewards remain almost constant no matter what (except for halving events, during which they are halved forever), their USD value changes with changes in the BTC price.
Miners depend on the USD value of their rewards as they generally pay their operating costs like electricity bills in fiat. Thus, when the price of the cryptocurrency increases, the effective income of these chain verifiers also increases.
Mining’s 7-day hashrate growth had slowed down a bit when Bitcoin was struggling following the local top in April, as their earnings had fallen. However, when the last game in the rally above the $30,000 mark had occurred, the metric had of course returned again.
But while BTC has continued to consolidate endlessly around this level over the past few weeks, the metric’s value has fallen back into sideways movement. This may suggest that miners are currently not interested in expanding their operations further.
This reluctance to further invest in their facilities may come from the fact that the asset is at an uncertain point at the moment, having not been able to choose any direction.
It now remains to be seen if the mining hashrate will move from its sideways trend when Bitcoin eventually breaks out of its consolidation.
At the time of writing, Bitcoin is trading around $30,000, down 2% in the last week.
BTC has gone down during the past few days | Source: BTCUSD on TradingView
Featured image by Brian Wangenheim on Unsplash.com, charts by TradingView.com, CryptoQuant.com