Yesterday, October 8, 2023, a new historical record for bitcoin mining hashrate was set.
According to CoinWarz data, for the first time in history, 528 Ehash/s was exceeded.
The historical peak of bitcoin mining hashrate.
This was an hourly peak that occurred yesterday, slightly higher than the peak of 527 Eh/s on September 15.
It should be noted, however, that the monthly minimum hourly peak was recorded on October 5th at 345 Eh/s, and that after yesterday’s peak, the hashrate dropped back below 400 Eh/s.
To get a better idea of the current trend, it is better to look at daily or weekly averages rather than hourly peaks.
As far as the daily averages are concerned, the maximum peak is actually still the 15th of September, when the daily average of 488 Eh/s was exceeded for the first time in history.
It should be remembered that these are only estimates, as it is not possible to measure exactly how much hashrate is actually used for bitcoin mining at any given time, so the daily averages are better estimates than the hourly ones.
The growth trend
In the medium term, however, the trend seems to be up.
In fact, if we look at the weekly averages, we see not only that the all-time high of 440 Eh/s was reached just yesterday, but that they have been rising since the beginning of the year.
The year 2022 ended with a weekly average of the Bitcoin hashrate below 230 Eh/s.
However, as soon as the price of Bitcoin began to rise again, making mining more profitable, miners turned back on the less efficient machines they had turned off in 2022, and within a few weeks the hashrate was back to new all-time highs.
In particular, by the end of January, it had risen to nearly 300 Eh/s, a rate that was surpassed for the first time in bitcoin’s history just before mid-February.
With bitcoin’s first annual price spike to over $31,000 in April, the weekly average hashrate rose to nearly 360 Eh/s, then back to 330 in May.
A new surge occurred between June and July, first approaching 400 Eh/s and then climbing as high as 410.
It should be noted that from August, the price of bitcoin did not return above $31,000, and in September it even fell slightly and very briefly below $25,000. Nevertheless, shortly after the middle of the month, the weekly hashrate made a new all-time high above 430 Eh/s.
Yesterday’s record was set at around $28,000, which is 12% lower than the July high.
The Problem of Profitability
The fact is that with a lower BTC price and a higher hashrate, miners’ costs are rising while revenues are falling.
The current level of bitcoin mining profitability is near the lows of the beginning of the year, and not far from the all-time lows.
The estimate is currently just over $0.056 per THash/s per day, compared to $0.054 in January. However, in December 2022 it also fell below $0.051.
Suffice it to say that when the price of bitcoin was at its highest, at the end of 2021, and the hashrate was below 170 Eh/s, profitability had skyrocketed to $0.45 per THash/s per day, or almost ten times the current level.
Even at the end of 2020, before the last major bull run began, it was still above $0.060, with a BTC price below $20,000 but a hashrate below 120 Eh/s.
Bitcoin Mining: The Coming Halving and the Impact on the Overall Hashrate
In addition, in April 2024, the bounty for miners will be halved.
Perhaps it is possible that miners who have inefficient machines are trying to get the most out of them before they are forced to shut them down for good after the bounty is halved.
It is also possible that some miners are currently mining at a loss in order to accumulate BTCs before the halving occurs.
Indeed, it is not necessarily the case that all the BTC mined must be spent to pay the miners’ operating costs, so it is possible that someone is using the months before the halving to do some hoarding in anticipation of a hoped-for increase in the value of Bitcoin.
In fact, note that something like this already happened in 2019, before the last halving in May 2020, when the hasrate went from 40 to 100 Eh/s with a bitcoin price below $10,000.
At the time of the halving, the hasrate dropped from 121 to 94 Eh/s, but then started to rise again in September 2020 when the price of bitcoin exceeded $10,000 without going back below that threshold.