Bitcoin’s (BTC) hash rate seems to have stabilized for the first time after the halving event that took place on May 11th. According to data provided by blockchain.com, Bitcoin’s 7 day average hash rate has rebounded for the first time since the halving. On May 22nd it was 94.671 million TH/s, a small rebound of 1.11% from 93.636 million TH/s registered the day before.
Bitcoin Hash Rate Stabilizes
Many cryptocurrency bearish analysts were predicting Bitcoin’s hash rate to enter a “death spiral” in which hash rate falls without finding a bottom. Bitcoin’s hash rate is the total power used by miners to process transactions on the network and make the whole system more secure.
Miners are rewarded with BTC coins every single time they find a block. Of course, as the halving took place for the third time in history, miners are now receiving 6.25 BTC per block rather than 12.5 BTC, 50% less. This pushed many miners out of the market due to the fact that they are not competitive anymore. Indeed, only the most efficient miners continue operating.
The difficulty of the calculus Bitcoin miners need to do to process transactions adjusts according to the hash rate. When the hash rate falls, difficulty adjusts so more miners can enter the market. This allows them to be more efficient and still be available for operating.
As difficulty fell on May 20th, it allowed new miners to enter the market. Of course, it will be very important to see how the hash rate behaves in the coming days if the price remains stable. The larger the hash rate, the better for the entire crypto ecosystem. It would be more difficult to process a 51% attack or for a large group of miners to control the network.
Bitcoin’s price is also very important at the time of determining the profitability of miners. If miners receive fewer BTC but their price is doubled, then they would be able to face the current reduction in the reward.
Currently, Bitcoin is being traded around $9,200. We still need to wait to see the impact the recent market drop had on the hash rate. It is worth mentioning that Bitcoin moved by 2.16% in the last 24 hours, pushing the entire crypto market into the green territory – of course with some exceptions among the top 100.
