On-chain data shows the Bitcoin mining hashrate has continued its recent uptrend and has reached a new all-time high.
Bitcoin 7-Day Average Mining Hashrate Has Just Set A New All-Time High
The “mining hashrate” refers to a metric that keeps track of the total computing power the miners have connected to the Bitcoin blockchain.
This indicator can correlate with the network’s security, as this combined computing power controls and manages the chain. If a malicious attacker intends to take over the network, they would have to gain control over most of the online mining rigs.
Thus, the more computing power connected to the network, the harder it is to perform such a 51% hack, so the tighter the security of Bitcoin. This is only, of course, given that the hashrate is sufficiently decentralized.
Besides this correlation with the security, the mining hashrate’s value can also tell us about the sentiment around the cryptocurrency among the chain validators.
When the value of this indicator goes up, it means that the miners are adding more power to the network right now. Such a trend suggests these chain validators find the chain attractive to mine.
On the other hand, a decline in the metric suggests some miners have decided to take their machines offline, likely because they are currently finding mining unprofitable.
Now, here is a chart that shows the trend in the 7-day Bitcoin mining hashrate over the past year:
The value of the metric appears to have been going up for a while now | Source: Blockchain.com
The chart shows that the 7-day Bitcoin mining hashrate climbed sharply between the start of September and the end of November. The miners expanded their facilities in preparation for a rally, which they got when BTC started its current run.
The BTC price directly influences the revenue of these chain validators, as the block rewards they receive are fixed in terms of BTC. Still, their USD value varies alongside the cryptocurrency’s spot price.
This month, though, the metric had started by observing some decline, even though Bitcoin had seen some further uptrend. However, the Bitcoin mining hashrate has kicked back up in the past week.
The reason behind this reignition in the hashrate momentum has been the revival in the popularity of the Inscriptions, which has lead to the transaction fees on the network exploding.
The fee is the second component of the miners’ revenue, so it makes sense that its surge would entice this cohort to make further investments in their facilities.
With the latest increase in the indicator during the past day, the indicator has now set a new all-time high, as the entire drawdown from earlier in the month has been retracted.
BTC Price
At the time of writing, Bitcoin is trading at around $42,600, up 3% in the past week.
Looks like the asset's price has made some recovery during the past day | Source: BTCUSD on TradingView