Bitcoin Mining Power Reaches New Peak, Defying Market Projections

Bitcoin Hashrate Soars to Record High While Transaction Fees Hit Multi-Year Lows

Bitcoin’s (BTC) network continues to demonstrate resilience, with its hashrate reaching a new all-time high. The seven-day moving average climbed to 833 exahashes per second (EH/s), reflecting a 9% jump from 767 EH/s in recent days, according to Glassnode data.

Despite Bitcoin maintaining a price near $100,000, network transaction fees have dropped to historic lows. The cost of high-priority transactions in the Bitcoin mempool now sits at just 5 sat/vB ($0.69), significantly reducing miners’ earnings from fees.

Miner Mag reports that demand for mining hardware is beginning to decline following a pre-halving surge. Many mining firms had aggressively expanded their infrastructure in preparation for Bitcoin’s April 2024 halving, which cut block rewards by 50%. However, with the halving now behind, analysts predict slower hashrate growth in the coming months.

Over the past 18 months, institutional investment in mining operations has fueled a substantial increase in hashrate, enhancing Bitcoin’s security. Since the halving, the hashrate has risen by more than 40%, though mining profitability has remained relatively stagnant due to persistently low transaction fees.

Bitcoin’s long-term sustainability relies on transaction fees gradually replacing block rewards as miners’ primary revenue source. However, with fees at multi-year lows, miners are facing challenges covering operational costs.

The network is now bracing for its next difficulty adjustment in four days, projected to rise by over 6%, setting a new record and placing additional strain on mining operations.