As Hashrate Rises, Will #Bitcoin Miners Now Get Back to Business?
So far, 2023 has been proven to be in the bull’s favor as the price of Bitcoin (BTC) increased more than 40%. But after a disastrous 2022, Bitcoin miners should finally start to come back online.
According to data from TradingView, BTC hit a local bottom at around $16,500 on Jan. 1 and pumped to a high of $23,300 on Jan. 23.
BTCUSD, Coinbase. Source: TradingView
The increasing Bitcoin price also results in an increase in profitability for Bitcoin miners.
Bitcoin Hashrate Edging up
The Bitcoin hashrate has been trending upwards from 2022 lows. According to data from CoinWarz, the latest BTC hashrate is 272.94 EH/s. This year, it recorded a new high of 296.8 EH/s on Jan. 16.
The hashrate indicates the computational power of a blockchain network. It increases when more computers join a blockchain network to process hashes.
Thus, an increase in the hashrate indicates more Bitcoin miners are participating in validating the transactions and keeping the network secure.
Jaran Mellerud, an analyst at Hashrate Index, told the Financial Times, “The sentiment among miners is better than in a long time. For many bankruptcy threatened players, the sudden increase in the bitcoin price is a lifeline.”
Major Mining Companies Tumbled During Crypto Winter
The last months of 2022 were a huge challenge for mining companies when the FTX collapse triggered an extreme crypto winter. One of the largest crypto mining companies, Core Scientific, filed for Chapter 11 bankruptcy in Dec.
Other mining companies such as Riot Blockchain, Marathon Digital Holdings Inc., and Hut 8 Mining Corp disclosed a year-on-year decline in revenue and huge losses.
However, the stocks of these Bitcoin mining companies gave double-digit gains to investors in 2023 with the rising BTC price.