Bitcoin Hash Rate Hits New Record as BTC Nears $100,000

Bitcoin Mining’s 7-Day Average Hash Rate Has Soared Recently

“Hashrate” refers to a metric that tracks the total amount of computing power that Bitcoin miners as a whole currently have connected to the network. Its value is measured in units of hashes per second (H/s), or the largest and most practical terahashes per second (TH/s).

Miners use their computing power to solve certain mathematical puzzles, and the reward is the chance to add the next block to the chain. However, at no point does the collective computing power connected to the network work together.

Instead, miners compete against each other using their individual hashrate to be the first to solve these puzzles and receive compensation. However, despite this fact, the “total” hashrate is still a useful indicator as it provides insight into the status of these validators as a whole.

When the value of this metric increases, it means that miners are connecting additional power to the network. This trend suggests that this group is considering BTC mining as a profitable venture.

On the other hand, the decreasing indicator implies that some of the miners have decided to abandon the blockchain, possibly because they are no longer seeing a positive return.

Now, here is a chart showing the trend of the 7-day average of Bitcoin hash rate over the past year:

As shown in the chart above, Bitcoin’s 7-day average hash rate has seen a rapid increase recently, implying that miners have been expanding their facilities.

At the beginning of the month, the metric set a new record of 755 TH/s, but although the cryptocurrency continued to rise to new highs in the following weeks, the metric registered a decline.

Bitcoin miners derive their income from two sources: transaction fees and block subsidies, but the latter usually contributes to the vast majority of their income, so the former can be ignored when trying to measure miners’ profitability.

The block grant remains fixed at the BTC value (except during Halvings, events that occur approximately every four years where it is permanently halved) and is awarded at a nearly constant rate of time. As such, the only way miners’ income can change is when the price of BTC itself changes.

Bullish periods naturally lead to greater profitability for these on-chain validators, so they tend to invest more in their farms. This is why the trend observed at the beginning of the month was surprising.

Miners may not have been very confident about the bull run at the time, but with the last leg up to prices near the $100,000 level, Hashrate appears to be back on track, indicating that this group has joined the rally.

After the latest surge, Bitcoin’s 7-day average hashrate reached a new record of over 768 TH/s.

BTC Price

At the time of writing, Bitcoin is floating around $98,000, up more than 9% in the last week.