Bitcoin hashrate continues its upward trend and is on track to retest the all-time high of 400 TH/s after experiencing a spike last weekend (May 27-28, 2023).
Hash rate quantifies computing power within a Proof-of-Work (PoW) network. Additionally, it serves as a metric to assess the overall health and security of your network.
A higher hash rate indicates more attempts to solve the target hash and win blocks. This indicates that more miners are joining the network or more powerful mining equipment is coming online.
bitcoin hash rate
The chart above shows a sustained upward trajectory for Bitcoin hashrate. Although there was a temporary decline around May 2021 due to the ban on PoW mining in China, the recovery from late June 2021 has accelerated the overall upward trend.
In March, members of the Bitcoin community commented on the unprecedented hashrate rise and offered a theory to explain the problem.
Seb Guspirou, CEO of mining firm Big Block DC Bitcoin, said it was due to the influx of miners upgrading outdated equipment. However, River financial analysts Sam Wouters He attributed the rise in hashrate to BTC’s positive price action, which caused the major cryptocurrency to surge from $22,000 to $28,300.
In March, the hash rate hit an all-time high of 398 TH/s. However, after a temporary dip, it surpassed this level on May 11, reaching 400 TH/s. After 3 weeks, the hash rate is poised to retest this level, with a current reading of 396 TH/s.
There is an ongoing debate as to whether the Bitcoin price follows the hashrate or if the opposite is true.
Co-founder of Reflexivity Research, Will Clementepointed out that during the bear market of 2019, the hash rate did not hit all-time highs until Bitcoin’s price tripled from its lows, suggesting the former. This time around, the hashrate has doubled since its May 2021 low, but the BTC price is only up 75% from its low.
Similarly, the host of the Orange Pill podcast, Max Kaiser“It is more important to track hashrate than price,” he said, adding that it is “mathematically guaranteed” that prices will rise as hashrate rises.
Analysis of difficulty trends crypto slate researcher James Van Straten He pointed out that higher hashrates would require higher adjustments. However, since 2020, the summer period has typically been characterized by a lower difficulty adjustment, which was not the case this year.
Mining difficulty refers to the algorithm’s ability to adjust when to solve blocks. For example, as the hash rate increases, the time to resolve the target hash decreases, but the block time should stay around 10 minutes and is difficult to adjust to higher values.