Bitcoin (BTC) Miners Stay the Course as Hashrate Stays Near All-Time High Despite Price Plunge

On-chain data shows the Bitcoin mining hashrate has stayed near the all-time high (ATH) recently despite the plunge BTC’s price has seen.

The 7-day average Bitcoin mining hashrate stood at 788 terahashes per second (TH/s) on Monday, showing a slight decrease from the all-time high (ATH) of 801 TH/s observed earlier this month.

Despite the recent plunge in BTC’s price, the hashrate has remained at a high value.

Bitcoin 7-Day Average Mining Hashrate Value Still Shows A High

Miners play an essential role in the Bitcoin network by verifying transactions and adding them to the blockchain. The hashrate serves as an indicator of the total computational power connected to the Bitcoin blockchain by all miners.

When the value of this metric rises, it usually indicates that either new miners are joining the network or existing miners are expanding their operations. Both scenarios suggest that these chain validators are finding BTC mining to be lucrative.

On the other hand, a decline in the indicator could mean that some miners have decided to disconnect their machines, possibly because they’re no longer finding the activity profitable.

The 7-day average Bitcoin mining hashrate, as observed on Blockchain.com, can be seen in the chart below:

The 7-day average Bitcoin mining hashrate set an ATH on the 15th of this month, as can be seen in the graph above. BTC hit its top a couple of days later and has since followed an overall downward trajectory.

The indicator has also declined during this period, but it’s interesting to note that the drawdown in its case has been quite small. At the ATH, the hashrate was around 801 TH/s, while today it stands at 788 TH/s, showing a decrease of just 1.5%.

Generally, the price of the coin tends to be a big factor in the revenue of BTC miners, so the trend in the mining hashrate also tends to follow the price action.

This dependency arises from the fact that the block subsidy, a BTC reward that validators receive as compensation for mining blocks, remains fixed in BTC value and is paid out at a more or less constant rate of time, leaving only the price as the variable attached to it.

Thus, given this relationship, it’s interesting that the hashrate didn’t plunge during the recent price crash. However, it’s worth noting that price may not be the only factor putting a squeeze on the miners’ revenue, as the mining difficulty has also been at a record value.

Bitcoin Mining Difficulty, Hashrate Relationship

The mining difficulty is a feature built into the Bitcoin blockchain that controls how hard miners would find it to mine the cryptocurrency at any given point.

As mentioned earlier, the block subsidy is given out at a nearly constant rate of time. The only reason this is possible is thanks to the existence of the difficulty.

Whenever miners increase the hashrate, they become faster at their task and, thus, produce blocks at a faster pace. To counteract this, the network increases the difficulty in the next biweekly adjustment, bringing the miners back to the standard pace of 10 minutes per block.

A consequence of this is that no matter how many miners join the network, the total reward pool always stays the same. So, with the hashrate sitting near an ATH and the coin being harder to mine than ever before, the revenue of individual miners must be quite constrained indeed.

Despite these conditions, the Bitcoin miners have still not decided to scale back on their operations, which suggests they are expecting the bullish momentum to make a return.