By
Tolu Ajiboye
April 23rd, 2024
Since Bitcoin fell from its All-Time High (ATH) price level above $68,000 it attained back in November, the coin has not retested this milestone ever since, despite the steadily growing hashrate.
The Bitcoin (BTC) network’s mining hashrate has printed a new All-Time High (ATH) according to data from Glassnode, a crypto markets data analytics provider. Per the data, the mining hashrate was pegged at an all-time high of 208 million terahashes per second as of yesterday, January 2nd.
The hashrate is a measure of the security strength of the Bitcoin network. It is used to connote the combined computing power that is plugged into the network with the sole aim of verifying transactions and winning the designated BTC rewards for completing such tasks. The more the number of computers plugged in, the more secure the network is and this has a way of increasing the difficulty of the mining process in general.
Last year marked a very tumultuous moment for the crypto industry as the Chinese government sent miners packers on grounds that the Proof-of-Work mining process is against established financial order and has undue environmental impacts. Up until that time, China controlled over 46% of the global mining hashrate and the ban resulted in a massive plunge in the mining hashrate.
The Exodus of Miners and Rebalancing
The ban offset mining activities in China and led to a massive exodus of miners from the country. While the Chinese government turned its back on PoW mining, other countries, including Kazakhstan, Iran, Canada, Russia, and the United States embraced miners as these nations run on cheap and clean energy sources.
As of October last year, Coinspeaker reported that the United States grew to become the top destination for Bitcoin miners as a number of proactive mayors like Miami’s Francis Suarez started granting safe havens and incentives to grow the industry. While big multinationals shipped their mining hardware to other countries to continue their operations, small-scaled domestic miners sold off their machines at discounted prices.
For a ban that raged for the better part of 2021, each firm that relocated its operations elsewhere has had time to rebalance despite the disruptions in the global supply chain industry. With more and more miners coming back online, the hashrate has continued to grow, restoring hope in the security strength of the Bitcoin network.
While the growing hashrate is good to restore confidence in the network as it makes it more immune to attack, operating miners who were not impacted by the ban or the resettlement that followed were those who benefitted the most. A lower hashrate connotes the amount of work needed to be put in to gain the same amount of reward is lower and vice versa.
Impact of Bitcoin Mining Hashrate on Price
Since Bitcoin fell from its All-Time High (ATH) price level above $68,000 it attained back in November, the coin has not retested this milestone ever since, despite the steadily growing hashrate.
The logic here consists in the fact that the network is growing more secure in terms of its miner distribution and will translate to more confidence on the part of regulators and investors, thus informing new buyups. With the current price outlook, this has proven to be an analysis fit for paper rather than reality.