Bitcoin Hash Rate Crashes From Record 136 EH/s To 75 EH/s In Less Than A Month

March 26, 2020 / by Crypto.IQ

The Bitcoin (BTC) hash rate has declined from a record high of 136 EH/s to 75 EH/s in less than a month, erasing many months of hashrate gains. Indeed, the Bitcoin (BTC) hashrate has not been this low since September.

This hash rate drop is perhaps not surprising, since the price of Bitcoin (BTC) has fallen from $10,500 in the middle of February to as low as $3,850 in the middle of March. The Bitcoin (BTC) price has now recovered to over $6,500, but apparently miners need Bitcoin (BTC) to be over $10,000 to sustain an increasing hash rate.

Essentially, if the price of Bitcoin (BTC) declines, the profitability of Bitcoin (BTC) mining declines as well, and this can push a fraction of miners over the cliff of unprofitability.

Another factor is that the block halving is coming in less than 50 days, at which point mining profitability will instantly be cut by 50%. The looming halving combined with declining Bitcoin (BTC) prices may be leading some miners to choose to liquidate their farms instead of continuing.

That being said, a significant decline in hashrate like what is going on now increases mining profitability, and perhaps that will help some miners to turn their rigs back on. Eventually this effect should stop the decline in the Bitcoin (BTC) hash rate, especially if the price of Bitcoin (BTC) continues to steadily increase.

On a final note, the rapid decline in hash rate has led to the average block time increasing from 10 minutes to 15 minutes, meaning that the Bitcoin (BTC) network is significantly slower. This effect was significant enough to push the estimated block halving date back by two days, from May 12 to May 14.

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