Bitcoin Hashrate Hits All-Time High as Bitcoin Holds Over $20,000

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Bitcoin’s hashrate hit a new all-time high of 331EH/s, according to data from Glassnode. Historically, there has been a loose correlation between hashrate and Bitcoin price debate over whether hashrate follows price or vice versa.

ath hashrate

The hashrate spike comes at a tough time for miners as some struggle to repay debt Payments following Bitcoin’s 70% drawdown from $69,000. In addition, research conducted by CryptoSlate indicates that there may be other capitulation.

If the growing trend of increasing hashrate continues without further price increases, a second sellout could occur as miners sell their Bitcoin. A similar situation occurred in June when miners sold around 20,000 BTC.

Hashrate Security

The advantage of a constantly increasing hashrate is that the possibility of a 51% attack on the network decreases. With a hashrate of 313EH/s, an attacker would need around 1.9 million Antminer KA3 miners (166Th).

In 2018, it would have cost only $1.4 billion to conduct a 51% attack on bitcoin when the cost of mining 1BTC was only $8,000. Today, the hashrate has increased by 900%, and therefore the network is all the more secure. Even in 2018, a bad actor would have needed 2.4 million high-end ASIC miners to perform the attack.

However, although the increase in hashrate has made the network more secure, it also leads to higher costs for mining Bitcoin. A higher hashrate means higher network difficulty and, therefore, a reduction in BTC generated per kW of energy.

Bitcoin miners

When the cost of mining Bitcoin exceeds the price, miners often face liquidity issues. The issues stem from a myriad of factors, including margin calls, cash flow, and other general operating costs. As a result, Binance Pool launched a $500 million fund to support “struggling mining assets”.

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However, investment in Bitcoin mining shows few signs of slowing down. Several mining companies, such as CleanSpark, are looking for new investors as they bought 3.83 Argo miners. Riot inaugurated a new 1 GW mining facility, Great American Mining was acquired by Crusoe Energy and Compass Mining signed an agreement on a new 27 MW mining center.

New innovation in the mining space includes new liquid-cooled mining machines from Fabric Systems, a mining investment entity of Greyscale, and Block is launching a new mining unit acquiring the former CTO of Argo.

While the short-term picture may be worrying for Bitcoin miners, there is little evidence of long-term bearish sentiment.



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