Despite Bitcoin’s price struggling to take off, the hashrate has touched a new all-time high.
New record for Bitcoin hashrate
Yesterday, in fact, according to data from bitinfocharts.com, it exceeded 220 Ehash/s for the first time in its history, even touching 230.
The previous record of January 20 was 217 EH/s.
But according to the hourly data of coinwarz.com, Saturday had touched a single peak of 263 Eh/s, which is almost double the value of February 16 last year (136 Eh/s).
The curious thing is that last year, in February, the price was around $48,000 and was heading towards $60,000, while these days, it is below $43,000.
The relationship between hashrate and Bitcoin price
Generally, the hashrate increases as the price rise because since the miners’ takings in BTC are pretty much always the same, in the case of an increase in the value of BTC, the real value of those takings goes up. Since mining is a competition in which whoever processes the most hashes wins, when miners cash in more, they invest more in resources to increase the amount of hashes they can process.
However, it should be remembered that increasing the hashrate is a very slow process, as it often requires the purchase and configuration of new machinery while the price rises and falls much faster.
For example, in late 2020, before the bull run began, the price of Bitcoin was around $10,000, or less than a quarter of what it is today, and the hashrate was 130 EH/s or just over half of what it is today. That means that the price in the last sixteen months has proportionally increased much more than the hashrate, which justifies the growth of the hashrate at this time when the price is not growing.
The difficulty of mining
Note that yesterday the block-time of Bitcoin, usually around 10 minutes, has dropped even below 8 minutes, although the difficulty is at an all-time high. At this point, it is very likely that the difficulty will further increase in the coming days.
With such a high difficulty, and a relatively low BTC price, the profitability of mining has fallen to the lowest since January 2021, and this suggests that miners believe that an increase in the value of Bitcoin is likely in the medium term.
In fact, with such low profitability, the real convenience in mining Bitcoin lies not so much in cashing in BTC and selling them in the market to have the fiat money to pay for electricity but in keeping a portion of them in the portfolio in the hope that they will increase in value in the future.
In short, it seems that miners are taking advantage of this period to accumulate Bitcoin, intending to probably sell them in the coming weeks or months at higher prices than they are now.