The hashrate of Bitcoin reaches the all-time high

The Bitcoin (BTC) network has reached a new historical milestone with its hashrate hitting a peak of 833 exahash per second (EH/s) on a seven-day moving average, according to data from Glassnode.

This represents an increase of 9% compared to the 767 EH/s recorded in the previous days, consolidating the security and resilience of the network.

A growing hashrate despite slowdown forecasts on Bitcoin

The mining sector has experienced strong expansion in the last year and a half, primarily driven by institutional investments in mining infrastructure. 

The key event behind this increase was the Bitcoin halving of April 2024, which reduced the block reward by 50%, leading many miners to enhance their operations in anticipation of potentially greater future profitability.

According to The Miner Mag, the intense competition has driven many operators to accumulate new equipment to ensure competitiveness. However, now that the halving has passed, analysts predict a slowdown in the growth of the hashrate due to the decrease in demand for new hardware.

Despite the price of Bitcoin hovering around $100,000, the transaction fees have reached extremely low levels. In the mempool of Bitcoin, the cost for a high-priority transaction is just 5 sat/vB ($0.69), one of the lowest values in recent years.

This reduction in transaction costs poses a challenge for miners, as it reduces their earnings from fees, making it more difficult to cover operational costs. In theory, Bitcoin’s economic model envisions that in the long term, transaction fees will gradually replace the block subsidy as the primary source of revenue for miners. 

However, with the current market dynamics, this transition appears more complex than expected.

The impact on the profitability of mining

The increase in hashrate has not led to a significant rise in the profitability of mining, which has remained relatively stable in recent months.

The halving in April reduced the block reward, but without a corresponding increase in transaction fees, the profit margins for miners remain under pressure.

For the miners, the growth of the hashrate also means greater competition and difficulty in maintaining profitable operations. 

With the arrival of the next difficulty adjustment, expected in four days, a further increase of over 6% is anticipated, which could make it even more challenging for some operators to remain competitive.

What to expect for the future?

The recent record of Bitcoin’s hashrate demonstrates that the mining ecosystem remains solid and expanding, despite economic challenges. 

However, the economic model of Bitcoin faces an important test: the transition from dependence on the block subsidy to a revenue structure based on transaction fees.

With the expected increase in mining difficulty, the economic sustainability of operations will become even more crucial. Miners will need to optimize their costs and find alternative strategies to ensure long-term profitability. 

In the meantime, investors and analysts will continue to monitor the behavior of the hashrate to assess the upcoming bull and bear market trends of Bitcoin.