Bitcoin [BTC]: Yes, an all-time high mining hashrate, but at what cost
Bitcoin [BTC] investors may finally have something to cheer about. Amid the general downturn in global financial markets and a subsequent collapse of the cryptocurrency market, one thing remained consistent. BTC’s hashrate continued to grow despite tough times in the crypto market.
According to data from the blockchain analytics platform Messari, Bitcoin’s hash rate, on October 1, rose to a peak of 282 MH/s. At press time, the mining hash rate on the network was 245 MH/s.
Glassnode, in a new report, noted that the new all-time high can be termed 242 Exahash per second. For context, “this equates to all 7.753 billion people on Earth, each completing a SHA-256 hash calculation approximately 30 billion times every second,” the on-chain analytics platform stated.
Source: Glassnode
The journey to the all-time high
In the assessment of the mining activity on the network, Glassnode took into account the network’s hash band in its report. It found that Bitcoin’s hash band began to “relax” around the end of August, suggesting an improvement in mining conditions on the Bitcoin network.
Historically, Glassnode found that this was usually followed by a rise in the price of the leading coin.
However, Glassnode noted that with a continued decline in the price per BTC, the recent increase in hash rate on the network was due to “more efficient mining hardware coming online and/or miners with superior balances holding a larger share of the network hash power.”
Source: Glassnode
In addition, Glassnode also assessed the Mining Pulse metric. This metric, according to Glassnode, is used to track miner activity. It measures the average block interval relative to the target of 600 seconds.
A look at Bitcoin’s Mining Pulse revealed that there was a severe drop in mining activity on the network that spanned between late May and early August.
In past bear markets, such moves have been followed by a “severe and rapid decline in hash rate.” Commenting on whether a similar reaction was imminent, Glassnode added that the same “remains to be seen.”
What is the hashrate BTC cost
With a growth in the hash rate on the network, the difficulty of mining also began an upward trend. This meant that the cost of production per unit of BTC witnessed an increase.
With a continued decline in the price per BTC, an increase in production costs put stress on miners’ income, Glassnode found.
Source: Glassnode
According to Glassnode, the increase in production costs led to a decrease in revenue per Exahash. This figure was at an all-time low of 4.06 BTC per EH per day. Glassnode stated that
“On a USD-denominated basis, this equates to between $78k to $88ki income per EH per day. This has returned to Oct-2020 levels, which were after the 2020 halving event, and where BTC prices were around $10k (currently ~$20k). From this we can see that a 66% increase in difficulty and hashrate since October 2020 equates to an approximate halving in revenue per hash.”
Source: Glassnode
Still trading below the psychological $20,000 region, BTC changed hands at $19,644.53 at press time, according to data from CoinMarketcap.
