There is always an abundance of exciting cryptocurrency metrics. While not everyone pays close attention to the Bitcoin hashrate chart, the current trend is somewhat problematic. Ongoing developments around the world make their mark on the mining segment.
Bitcoin Hashrate Keeps Dropping
It is anything but surprising to see the Bitcoin hashrate on a steady decline over the past few weeks. Recent regulatory interventions in China make it unfavorable to mine in that country. China is the most significant region for Bitcoin mining – as it has been for years – there will be a step impact on the network hashrate. In this case, there is an ongoing decline from the peak of 168 exohash per second.
Today, there is just over 88 exohash in mining power for Bitcoin. a near 50% decline in quick succession, almost in sync with the price woes. As fewer people are now mining BTC, fewer miners will send Bitcoin to exchange to sell it. Although it remains unclear if the Bitcoin hashrate can recover from this negative trend, that is an upside of sorts.
For those who worry about the current lower Bitcoin hashrate, the network reached a similar level in November 2020. Although the hashrate usually goes up over time, it notes some steep corrections as well. As the current mining power is revisiting levels from early 2020, one has to wonder how this situation will evolve. Even fewer miners will not slow down the network, although it may become less secure.
It is also worth noting not all Chinese miners will pack up their mining operations. Several of them are already moving to other regions searching for affordable – and preferably, renewable – energy sources. The United States remains an appealing region in that regard, although other countries should not be overlooked. Bitcoin mining will always remain popular, regardless of what individual governments may want to do about it.
Ethereum Hashrate Declines As Well
The Bitcoin hashrate trend is visible for everyone to see. However, the world’s leading cryptocurrency isn’t the only network to see such a setback. Ethereum has a very similar issue right now, as its mining power is on a steep decline as well. The reason for this trend might be a bit different, however, even though the Ethereum price is not doing miners any favors.
It is uncertain how much of the Ethereum hashrate originates from China, albeit it is safe to assume the Chinese government will curb those efforts as well. However, other changes on the horizon for Ethereum cause a division between miners and supporters. The introduction of EIP-1559 will affect miner earnings, as will the future transition to proof-of-stake.
With both leading networks suffering a hashrate decline, things are bound to get rather interesting. It may create an opportunity for transaction costs to come down, as fewer miners prioritize their favorite higher fees from now on. It remains unclear if either the Bitcoin hashrate or Ethereum hashrate can recover, however, as that seems rather unlikely under the current circumstances.