Bitcoin’s price fluctuates around USD 6,800, but the hash rate keeps increasing. The event would indicate the connection of a new batch of miners or a migration from BCH and BSV.

In recent days, the Bitcoin hash rate has been about to break a new record, after the network reached a rate of 145 EH/s on April 14th. This increase would indicate the introduction of new miners to the blockchain, despite the steady bearish trend of its market. However, there can be a relationship with the upcoming halving.

According to data from the Statoshi.info platform, Bitcoin registered early on April 14th its highest hash rate of the month, processing 145 EH/s in the early hours of that day. Likewise, it closed April 13th with an average hash rate of 125 EH/s, according to data from Coinmetrics. In this way, the network would be about to exceed the high that it recorded in early March when Bitcoin reached a rate of 150 EH/s.

Even more strikingly, the previous high occurred when the ecosystem was in better financial condition and Bitcoin’s price was around USD 9,000 per unit.

However, the outbreak of the coronavirus pandemic draws a completely different picture. The cryptocurrency market has been having a bearish trend for less than a month and the Bitcoin halving is increasingly close to occurring. At the time of writing this article, Bitcoin’s price is USD 6,730 per unit, according to data from Coingecko.

The rapid increase in hash rate would indicate that new miners are not taking into account Bitcoin’s current price; thus, deciding to connect their equipment to the network. The higher the hash rate of a blockchain, the greater the number of mining devices processing transactions there can be on the network.

Even though the charts show that the Bitcoin hash rate is increasingly high, it is important to consider the ups and downs that occurred between March and April. The drops in the hash rate of the network would indicate that the collapse of the cryptocurrency market has affected mining profitability, but not as much as expected. Miners have rather decided to reconnect their equipment before the halving occurs.

Reason for this Rebound

Alejandro De la Torre, Vice-President of Poolin, believes that the halving could have motivated this increase in the Bitcoin hash rate. In less than a month, the Bitcoin network will lower its reward per mined block to 6.25 BTC, an event that will reduce the profits of the mining industry by half. For this reason, miners may have decided to connect their equipment to take advantage of the last days of blocks with rewards of 12.5 BTC.

De la Torre also states that the introduction of a new batch of state-of-the-art mining devices may have led to an escalating hash rate. ASIC manufacturing companies Bitmain and MicroBT had delayed delivery of their most powerful miners due to the coronavirus. However, the community estimated that Antminer S19, S19 Pro and WhatsMiner M20 equipment would arrive between April and June.

Finally, Poolin executive stated that migration of miners from Bitcoin’s forked networks could be another reason for the rebound. According to data from Coinmetrics, the Bitcoin Cash and Bitcoin SV hash rate suffered a sharp drop on April 8th and 9th, respectively.

The decrease would indicate the disconnection of mining equipment from these blockchains due to the halving of both networks. There was a loss of profitability in Bitcoin Cash, a blockchain that stopped generating good revenues for miners due to the reduction in their reward.

The Coinmetrics graph also shows that just a few days after the disconnection of the ASIC equipment from BCH and BSV, the Bitcoin hash rate began to increase. This movement proves that some miners of these forks may have decided to start mining in Bitcoin and take advantage of is current profitability.

By Alexander Salazar

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