Bitcoin Hash Rate Reaches ATH, Profitability Drops

Bitcoin’s mining hash rate, or network computing power, hit an all-time high on Christmas day, but the profitability of the flagship crypto declined amidst greater pressure on miners, Cointelegraph reported.

Bitcoin’s hash rate peaked at 544 exahashes per second (EH/s) on December 25 according to data of Blockchain.com. Bitinfocharts confirmed the data. The platform reported an average hash rate peak over the weekend.

Bitcoin hash rates doubled this year

Bitcoin hash rates more than doubled in 2023, most likely in anticipation of the halving next year. Since January 2023, they’ve increased by 130%.

Bitcoin price reflects the increase

The price of Bitcoin reflected this increase over the same period that BTC hash rates added value, gaining more than 150% since Jan. 1, 2023. In early December, Bankless Times reported that Bitcoin mining revenue had hit an all-time high.

According to Reflexivity Research co-founder Will Clemente, quoted by Cointelegraph, the rate and price will both keep increasing. Looking at the hash rate on a logarithmic scale, he commented that China’s ban on Bitcoin mining barely registered on the radar.

Bad news for miners

So how is an increasing hash rate and price bad for Bitcoin miners? Simply put, they must work harder to mine each next block. Rising hash rates are only good for the implied hash-adjusted price and other theoretical price models. The hash price, which measures profit, dropped over the past week as the ordinal inscription frenzy of BRC-20 cooled. At the time of writing, the hash price was $0.09 per terahashes per second per day, Hashrate Index data showed.

Profitability is down 34% in 10 days

Bitcoin mining profitability dropped 34% since its 2023 high on Dec. 17. When demand increases, the hash price records corresponding growth, which results in elevated transaction fees.

At the end of November, Bitcoin hash rates passed the milestone of 500 EH/s, Cointelegraph reported.