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Bitcoin Hashrate Plummets Following Crypto Winter, What Will Follow Onwards?

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Bitcoin Hashrate Plummets Following Crypto Winter, What Will Follow Onwards?

The crypto winter keeps spreading to all sectors of the industry, especially resulting in Bitcoin failing to climb. Besides investors losing their funds due to price crashes, companies also downsize their workforce. Some other crypto firms declared bankruptcy, and many stopped some services to fight liquidity issues.

At a point, many miners also found it difficult to pay off their loans on mining equipment due to the price crash. According to reports, the collateral value of their mining rigs became too low to sustain the loans acquired with them.

Amid all these crises, the latest reports reveal that the bitcoin mining hash rate has plummeted due to the ongoing price fall. The data on Coinwarz shows that the hash rate fell by more than 26% within one month.

Related Reading | Data Suggests Buying On Coinbase Behind The Bitcoin Pump

Early in June, the Bitcoin hash rate was high at 292.02 EH/s. This increase brought hope to bitcoin supporters, showing that the network is healthy and not collapsing soon. But a few days ago, on July 9, the hash rate showed 178.44 EH/s but recovered to 241.07 EH/s.

Hashrate And Mining Difficulty Levels

Hashrate facilitates mining and transaction processing on a crypto network such as Bitcoin. A high hashrate indicates the health of a network. It means that many machines provide enough computational power to keep the network working. Such increased activity convinces investors that a network is worth their investment.

From early June, Bitcoin price tried maintaining the $20K mark, but by June 18, the price fell below $18K. But it regained the $20 mark.

BTC 1% down on the candle chart | Source: BTCUSD on TradingView

Besides the price being a little steady at $20K plus, Bitcoin mining difficulty had adjusted favorably for miners. For instance, the adjustment simplified new BTC block discovery by 3.7%. Miners expect it to reduce further by 0.13% after 1,600 BTC blocks. Also, there is a growing expectation that further adjustments are imminent.

Impact Of Crash On Bitcoin Miners

The revenue for miners has continued to drop due to the general market crash. The available data on blockchain.com shows more than a 79% loss of revenue within 9 months, amounting to $15M losses on July 4.

This fall in revenue is affecting many mining firms since the likes of Compass Mining plan to downsize 15% of its staff and reduce the earnings of its top executives. Many others, such as Riot Blockchain, Marathon Digital, etc., have sold their BTC holding to cushion increasing operational costs.

Related Reading | Bitcoin Drops Below $22,000, Is Peter Brandt’s Analysis Still In Play?

Many analysts believe that such a sell-off of BTC holdings will pressure the Bitcoin price in Q3 of 2022 and affect the price. But the good news for small miners in all these is that they can mine bitcoin given the fall in the price of graphics cards by 15% and fall in hash rate.

Featured image from Pexels charts from TradingView.com
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Report Shows Crypto Assets Record Steady Growth As Inflation Lowers

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Report Shows Crypto Assets Record Steady Growth As Inflation Lowers

The United States’ newest release on its inflation rate for July has created a celebration reason for many, especially the crypto sector. According to the Department of Labor publication, the July customer price index (CPI) report dipped to 8.5%. This was against its last year’s value of 9.1%.

With the report’s release, many people have expressed their recommendations for the Biden Administration and their shock. Some confessed that they have expected to see a spike in inflation due to some of the prevailing factors at the moment. They mentioned that the ongoing Ukraine-Russia war and price increase in goods were expected to play a role.

US President Joe Biden has reacted to the great news of the CPI report. Commenting from the White House, he maintained that the news shows that the economy ran with zero percent inflation for July.

President Biden further mentioned that their approach to controlling inflation yields positive results. Hence, he encouraged Congress to pass the inflation Reduction Act. This will help to build an economy that would reward hard work.

In the past six months, the US reported a negative GDP value for the two quarters of the year. Inflation also rose within the period, as indicated by the high-priced economy.

The report pointed out the monthly energy cost reduction that hit 4.6%. The value contradicts that of 2021, which gave a climbing curve to be at 32.9%. On the part of food expenses, there is a continuous uptrend.

The report recorded an 11% increase for July and a 10.9% rise on a year-over-year basis. Pundits reported that this value stands as the highest surge since May 1979.

Cryptocurrency market trends downwards | Source: Crypto Total Market Cap on TradingView.com

Gasoline prices dipped by 7.7% monthly to give drivers a little aid. However, it remained higher than the value for 2021 by 44%.

Crypto Market Followed An Uptrend

In a new development, the crypto market is making positive progress in price and value. However, the crypto space has been in shamble due to the impact of the crypto winter and other combining factors.

In addition, the geopolitical climate and macro influences had been quite unfavorable. As a result, bitcoin and most major crypto assets experienced drastic price drops over the first half of 2022.

While expecting the CPI July report, many cryptocurrencies dropped on August 9. On its part, BTC plummeted by 4% to trade at $23,100. This sudden downward move was after it hit the $24,000 level as of Monday. For Ethereum, the drop went below 5%.

But the market prices are making a bounce with most assets moving uptrend. For example, while Bitcoin has climbed above $24,200, Ethereum is increasing slightly beneath $1,900 at the time of writing.

Featured image from Phemex, Chart from TradingView.com
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Ethereum (ETH) Price Rallies in Anticipation of Upcoming Merge

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Ethereum Classic Price Rallies Than Ethereum