Bitcoin hashrate plunges after cryptocurrency winter, what will follow next?
The crypto-winter continues to spread to all sectors of the industry, especially as a result of Bitcoin failing to climb. In addition to investors losing their money due to price crashes, companies are also reducing their workforce. Some other crypto companies declared bankruptcy, and many stopped some services to combat liquidity problems.
At one point, many miners also found it difficult to repay their loans on mining equipment due to the price crash. According to reports, the collateral value of their mining rigs was too low to maintain the loans they received.
In the midst of all these crises, recent reports reveal that the hash rate of bitcoin mining has fallen due to the ongoing fall in prices. The data on Coinwarz show that the hash rate fell by more than 26% in one month.
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In early June, the Bitcoin hash rate was high at 292.02 EH / s. This increase gave hope to bitcoin supporters, and showed that the network is healthy and will not collapse soon. But a few days ago, on July 9, the hash speed showed 178.44 EH / s, but returned to 241.07 EH / s.
Hash rate and mining difficulty levels
Hashrate simplifies mining and transaction processing on a crypto network such as Bitcoin. A high hash rate indicates the health of a network. This means that many machines provide enough computing power to keep the network running. Such increased activity convinces investors that a network is worth the investment.
From the beginning of June, the Bitcoin price tried to maintain the $ 20K mark, but by June 18, the price fell below $ 18K. But it regained the $ 20 mark.
In addition to the price being a bit stable at $ 20,000 plus, the difficulty of Bitcoin mining had adjusted favorably for miners. For example, the adjustment simplified new BTC blocks by 3.7%. Miners expect it to decrease further by 0.13% after 1600 BTC blocks. There is also a growing expectation that further adjustments are imminent.
The effect of the crash on Bitcoin miners
Income for miners has continued to fall due to the general market crash. The data available on blockchain.com shows more than a 79% revenue loss within 9 months, equivalent to a $ 15 million loss on July 4th.
This fall in revenue is affecting many mining companies since those like Compass Mining plan to reduce 15% of employees and reduce the revenues of top executives. Many others, such as Riot Blockchain, Marathon Digital, etc., have sold their BTC holdings to curb rising operating costs.
Related reading | Bitcoin falls below $ 22,000, is Peter Brandt’s analysis still in play?
Many analysts believe that such a sale of BTC holdings will push the Bitcoin price in the third quarter of 2022 and affect the price. But the good news for small miners in all of these is that they can recover bitcoin given the fall in the price of graphics cards by 15% and the fall in the hash rate.
Featured image from Pexels charts from TradingView.com
