Bitcoin Hashrate Has Barely Changed Despite Price Surge
Mining activity data of Bitcoin (BTC) is not reflecting the recent price surge from roughly $9,000 in the first-week of July to nearly $12,000 at the time of writing this article.
As per Coinmetrics data, hashrate rose roughly on July 7 and has stood mostly unchanged despite volatility towards lower side.
The hashrate reflects the aggregate of all miners trying to identify hashes that would establish fresh valid blocks. In general, there is a robust relation between hashrate and price, as greater BTC value boosts profit margins for every individual miner.
Since the beginning of last month, rate of increase in hashrate has eased, following the decrease in difficulty decreased in the beginning of June. The steep decline in hashrate in mid-July, following a considerable increase in complexity, indicates that the balancing system overstepped.
Complexity was fixed too much on the higher side for the prevailing hashrate, resulting in a slowdown of block creation.
Even though the price of Bitcoin stood unaltered for a major portion of July, eventually short covering and rise in optimism sparked a rally that took the price to around $12,000 in the latter half of the month. Hashrate continues to remain below its historical peak despite the sharp rally in the price.
During prolonged uptrend, hashrate follows price as the availability of fresh mining equipment is restrained by logistics issues. Nevertheless, the sector is facing additional issues arising from the power struggle at Bitmain.
Notably, shipments of new mining equipment have stopped for the past three months.
News of suspension came up against the backdrop of continuing issues between Jihan Wu and Micree Zhan, co-founders of Bitmain, for control over the company.
Bitmain is one of the leading manufacturers of ASIC equipment, with companies such as MicroBT giving them a tough contest since the beginning of this year.
ASIC equipment supply is not available currently, but the market uptrend enabled miners using the old S9 series to benefit from low electricity costs of $0.04, as per Asicminervalue.
As miners have started using equipment other than that of Bitmain to step up their operations and old miners are entering the business again, there is an expectation of an increase in the hashrate.