Bitcoin Hashrate Falls Off, Miners Expecting Pause In Bull Run?

On-chain data shows the Bitcoin Hashrate has seen a setback recently, a potential indication that miners may not believe the asset’s run would last.

Bitcoin Mining Hashrate Has Declined Since Its All-Time High

The “Hashrate” refers to a metric that keeps track of the miners’ total computing power currently attached to the Bitcoin network. This indicator’s value is measured in terms of hashes per second (H/s) or the larger and more practical, terahashes per second (TH/s).

When the value of this metric registers an increase, it means new miners are joining the network, and old ones are expanding their farms. Such a trend implies that blockchain is a lucrative opportunity for these chain validators.

On the other hand, the declining indicator suggests some miners have decided to disconnect their rigs from the network, potentially because they can’t break even anymore.

Now, here is a chart that shows the trend in the 7-day average of the Bitcoin Mining Hashrate over the past year:

As displayed in the above graph, the 7-day average Bitcoin Hashrate had sharply moved up earlier and set new records. However, the metric has dropped since peaking near the 755 million TH/s mark at the start of this month.

The earlier uptrend in the indicator resulted from the positive price action that the asset had been enjoying, as the price is directly linked to the miners’ revenue.

There are two ways that these chain validators make their income: the transaction fees and the block subsidy. The former is dependent on traffic conditions and can drastically change from day to day. The latter, on the other hand, has very specific constraints attached to it.

The block subsidy remains fixed in BTC value for about four years, at the end of which an event called the Halving cuts it exactly in half. These rewards are also given out at a more or less constant rate, meaning miners’ daily block subsidy income in BTC terms always remains quite predictable.

However, one variable is free to change, and it’s the USD value of these rewards. Whenever the price rises, so does the block subsidy revenue of the miners. This is why the Hashrate tends to see growth in bullish periods.

Bitcoin has been exploring new highs recently, but the Hashrate has interestingly stayed muted. The indicator is around 723 million, which means it has declined by more than 4% since the peak. This trend could signal that the miners expect the current rally to face an obstacle.