Bitcoin (BTC) may be struggling at $30,000, but under the hood, all-time highs of a different kind keep coming.
The latest data shows that Bitcoin network fundamentals — difficulty and hash rate — will hit new records this week.
Bitcoin mining difficulty, hash rate refuse to slow down
Bitcoin’s 2023 recovery has been about more than just BTC price action, with miners seeing a significant turnaround of their own.
As BTC/USD added 70% in Q1 alone, pressured mining participants saw some much-needed relief after the bear market squeezed profit margins to practically zero.
The comeback for miners is evident in difficulty, which among other things, reflects competition for block subsidies.
This has made new all-time highs for the past two months, and this week will be no exception. According to data from BTC.com, the difficulty will increase by approximately 2.1% on April 20, reaching 48.91 trillion.
The dizzying tally is a full 13 trillion higher than at the start of the year alone.
Bitcoin network fundamentals overview (screenshot). Source: BTC.com
Additionally, Bitcoin network hash rate is also estimated to be higher than ever, with raw data from MiningPoolStats etching a new all-time high of 418 exahashes per second (EH/s) on April 18.
Bitcoin hash rate raw data (screenshot). Source: MiningPoolStats
As Cointelegraph reported earlier this week, hash rate estimates are far from concrete and can be misleading, with calls now surfacing to reevaluate how it is measured and reported by those seeking to make bullish conclusions about BTC price strength.
However, as the old adage goes, “price follows hash rate,” and some commentators continue to watch the metric keenly as it drifts ever higher.
A key focus is Russia, stepping up mining activity over the past year to reportedly become the world’s second-largest miner in 2023, according to a report in Russian-language news outlet Kommersant.
While this has led to concerns that governments with a majority hash rate share could pressure miners to censor transactions, others believe that the real “danger” is using that hash rate for its intended purpose — earning Bitcoin.
“Adversaries hypothetically using hashrate to censor #btc transactions is a distraction from adversaries actually using hashrate to earn #btc revenue,” Pierre Rochard, vice president of research at Riot Platforms, wrote in part of a recent commentary on the topic.
Bitcoin miners not yet hoarding BTC
A look at the current state of miner balances meanwhile shows that on a rolling 30-day basis, BTC sales are increasing.
Related: What is Bitcoin hash rate and why does it matter?
On April 18, miners decreased their Bitcoin holdings by 648 BTC compared with one month ago, according to data from Glassnode.
The changes are significant compared with sell-offs that accompanied the FTX implosion in Q4 last year.
Bitcoin miner net position change chart. Source: Glassnode
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Source: https://cointelegraph.com/news/forget-btc-price-the-bitcoin-mining-boom-is-quietly-going-parabolic
