Key Points
- Bitcoin’s hashrate dipped to a two-month low of 575 EH/s on May 10, according to blockchain.com data.
- The dip in Bitcoin’s hashrate is largely attributed to mining firms switching off unprofitable rigs following the recent halving.
Bitcoin Hashrate Takes a Dip
Bitcoin’s hashrate, which is the computational power used in mining and processing transactions, hit a two-month low of 575 exahash per second (EH/s) on May 10.
This information is according to data from blockchain.com.
While there has been a slight recovery to around 586 EH/s, the decrease in hashrate is still noticeable.
The Impact of Halving on Hashrate
The expectation was for the hashrate to increase following the recent halving.
However, this has not been the case, at least for now.
The hashrate of the Bitcoin network has decreased since the halving event.
Mining firms appear to have contributed significantly to this decline.
For context, Bitcoin mining firms have been turning off unprofitable mining rigs since the fourth Bitcoin halving.
James Butterfill, the head of research at CoinShares, shared the same view on the hashrate drop.
According to Butterfill, the drop is a direct result of miners’ decision to turn off unprofitable rigs.
The current trajectory of Bitcoin’s hashrate aligns with CoinShares’ earlier prediction.
Despite a slight setback, the expectation is for the hashrate to reach 700 EH/s by 2025.
Hashrate, Profitability, and Mining Costs
Infrastructure and energy costs are the main factors determining the profitability of BTC miners.
There is also a correlation between Bitcoin’s price and profitability.
If Bitcoin’s price drops, some miners may find it unprofitable to continue operations.
This leads to a decrease in the hashrate as less computational power is dedicated to mining.
Nazar Khan, the co-founder and COO of TeraWulf, recently explained this correlation.
According to Khan, only smaller mining operations with less energy-efficient equipment will be at risk.
Khan explained that firms with a small number of mining machines will struggle to stay profitable.
