According to Glassnode data, Bitcoin hashrate has reached a new all-time high of 331EH/s.
Historically, there has been a shaky relationship between hashrate and Bitcoin price, sparking debate over whether hashrate follows price or vice versa.
The increase in hashrate comes at a difficult time for miners, who are struggling to meet debt payments after Bitcoin’s 70% drop from $69k. Furthermore, research indicates that there may be further capitulation.
If the increasing hashrate trend continues without a price increase, a second capitulation may occur as miners sell their Bitcoin. In June, miners sold approximately 20,000 BTC in a similar situation.
The benefit of increasing hashrate is that the likelihood of a 51% attack on the network decreases. An attacker would require approximately 1.9 million Antminer KA3 (166Th) miners to achieve a hashrate of 313EH/s.
In 2018, a 51% attack on bitcoin would have cost only $1.4 billion, when the cost of mining 1BTC was only $8,000.
Today’s hash rate has increased by 900%, making the network that much more secure. Even in 2018, a bad actor would have required 2.4 million high-end ASIC miners to carry out the attack.
While the increased hashrate has made the network more secure, it has also resulted in higher mining costs for Bitcoin. A higher hash rate indicates a higher network difficulty and, as a result, a decrease in the BTC generated per kW of energy.
Miners frequently face liquidity issues when the cost of mining Bitcoin exceeds the price. The problems stem from a variety of factors, including margin calls, cash flow, and other general operating expenses.
As a result, Binance Pool established a $500 million fund to invest in “distressed mining assets.”
